A Firm's Sales Grow, Its Current Assets Also Tend to Increase

question 21

True/False

a firm's sales grow, its current assets also tend to increase For instance, as sales increase, the firm's inventories generally increase, and purchases of inventories result in more accounts payable Thus, spontaneous liabilities that reduce AFN arise from transactions brought on by sales increases.

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Definitions:

Implied Authority

Authority of an agent that is not explicitly stated but is implied by the agent's actions or the circumstances of the task.

Terminate

To bring something to an end or conclude its operation.

Agency Relationship

A legal relationship in which one party, the agent, acts on behalf of another party, the principal, with the principal's consent.

Right

A legal, moral, or social entitlement to have or obtain something or to act in a certain way.