In the percent-of-sales forecasting method, which of the following is (are) assumed to increase proportionately with sales?
A) cash
B) accounts receivable
C) accounts payable
D) all of the above

Question

Quizplus · Accepted Answer

In the percent-of-sales forecasting method, it is assumed that cash, accounts receivable, and accounts payable will all increase proportionately with sales. This is based on the assumption that as sales increase, the company will need more cash to fund its operations, and will also have higher levels of accounts receivable and accounts payable due to increased sales and purchases. Therefore, all of the above options are correct.

In the Percent-Of-Sales Forecasting Method, Which of the Following Is