Which of the following accounts may reasonably be expected to grow with sales?
I. Accounts Receivable
II. Accounts Payable
III. Property, Plant and Equipment
IV. Inventory
V. Long-Term Debt
A) I, II, and III
B) I, II, and V
C) I, II and IV
D) III and V

Question

Quizplus · Accepted Answer

Accounts Receivable and Inventory are both assets that typically increase with sales, as customers buy more and more inventory is necessary to meet demand. Accounts Payable may also increase with sales as a company purchases more goods and services on credit. Property, Plant and Equipment and Long-Term Debt may not necessarily increase with sales, as they relate more to the long-term investments and financing of a business rather than its day-to-day operations.

Which of the Following Accounts May Reasonably Be Expected to Grow