If inventory needs grow with higher sales, the increase in accounts receivable will cover this cost.

Name: If inventory needs grow with higher sales, the increase in accounts receivable will cover this cost.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The increase in accounts receivable represents sales that have been made but not yet collected, so it does not cover the cost of inventory. It is important for a company to manage its inventory levels and cash flow to ensure that inventory costs are covered by sales revenue.

If Inventory Needs Grow with Higher Sales, the Increase in Accounts