Because accounts payable and accrued expenses increase with sales, they represent sources of spontaneous financing.

Question

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Accounts payable and accrued expenses are liabilities that increase as a company purchases goods and services on credit or incurs expenses that have not yet been paid. As sales increase, so do these liabilities, providing a source of financing without the need for additional borrowing or equity financing.

Because Accounts Payable and Accrued Expenses Increase with Sales, They