Which of the following changes in working capital is least likely,given an increase in the overall level of sales?
A) An increase in inventories
B) An increase in accounts payable
C) A decrease in accounts receivable
D) An increase in accounts receivable

Question

Quizplus · Accepted Answer

An increase in sales would typically cause an increase in accounts receivable, not a decrease. Therefore, option C is the least likely change in working capital given an increase in overall sales. Options A and D are likely changes, as increased sales could lead to higher inventories and accounts receivable. Option B could go either way, as increased sales could lead to increased accounts payable if the company is purchasing more inventory, but it could also lead to a decrease in accounts payable if the company is able to negotiate better payment terms with suppliers due to increased buying power.

Which of the Following Changes in Working Capital Is Least