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In the context of working capital management, a commission of 5% on credit sales payable in the third month affects both the cash flow and the accounts payable of a firm. When a company sells goods on credit, it generates accounts receivable, but the payment of commission to a salesperson creates a liability that must be settled in the future, in this case, in the third month. This introduces a timing consideration in the management of short-term funds. From ____ _______ _______ _______ _____ __________ __________ __________ _________ ____ _________ ________.
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