?(Percent
of sales
forecasting?)
Which of the following accounts would most likely vary directlywith the level of a? firm's sales? Discuss each briefly.
| Yes | No | | Yes | No |
Cash | ?____ | ?____ | Notes payable | ?____ | ?____ |
Marketable securities | ?____ | ?____ | Plant and equipment | ?____ | ?____ |
Accounts payable | ?____ | ?____ | Inventories | ?____ | ?____ |
Is cash likely to vary directly with the level of a? firm'ssales????(Select the best choice? below.)
A.
?Yes, cash receipts vary directly with sales and have a relationto the? firm's customers payment habits or the? firm's policyregarding payments on its accounts payable.
B.
?No, cash receipts follow sales with a lag related to thepayment habits of the? firm's customers and the? firm's policyregarding payments on its accounts payable.
Are marketable securities likely to vary directly with the levelof a? firm's sales????(Select the best choice? below.)
A.
?Yes, the value of marketable securities varies directly withsales.
B.
?No, marketable securities are not related to sales.
Is accounts payable likely to vary directly with the level of a?firm's sales????(Select the best choice? below.)
A.
?No, accounts payable will not vary directly with sales.
B.
?Yes, accounts payable will vary directly with sales.
Is notes payable likely to vary directly with the level of a?firm's sales????(Select the best choice? below.)
A.
?Yes, notes payable is likely to vary directly with sales.
B.
?No, notes payable will only follow sales if the firms uses aline of credit to finance its working capital needs.
Is plant and equipment likely to vary directly with the level ofa? firm's sales????(Select the best choice? below.)
A.
?No, plant and equipment is not likely to vary directly with thelevel of sales.
B.
?Yes, plant and equipment is likely to vary directly with thelevel of sales.
Are inventories likely to vary directly with the level of a?firm's sales????(Select the best choice? below.)
A.
?Yes, inventories are likely to vary directly with the level ofsales.
B.
?No, inventories are not likely to vary directly with the levelof sales.
