Increases in sales are typically accompanied by:

Question

Quizplus · Accepted Answer

Increases in sales typically require an increase in working capital to support the higher levels of production and sales. However, this increase in working capital is generally less than proportionate to the increase in sales, as some components of working capital (such as accounts payable) may also increase along with sales. Increases in fixed assets (choice A) may occur with an increase in sales, but the relationship between the two is not necessarily direct. Likewise, decreases in debt (choice B) and dividends (choice C) are not necessarily directly related to increases in sales.

Increases in Sales Are Typically Accompanied By