While the Assets and Accounts Payable of a Firm May

question 12

Multiple Choice

While the assets and accounts payable of a firm may reasonably be expected to grow with sales, ________ will not naturally grow with sales.

• A) cash
• B) supplier credit
• C) long term debt
• D) cost of sales

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Definitions:

Collateralized

Secured by an asset pledged as security for repayment of a loan, protecting the lender by providing a source of recovery in case of default.

Receivables

Amounts owed to a company by customers for goods or services that have been delivered but not yet paid for.

Without Recourse

A term indicating that the seller of an asset is not responsible for the buyer's inability to collect any debts or obligations related to the asset.

Interest Income

Income earned from deposit accounts or investments through the receipt of interest payments.