Identify the true statement, out of the below given statements :

Availability of Credit from suppliers reduce working capital requirement

The correct answer is option (4) : Availability of Credit from suppliers reduce working capital requirement

The true statement regarding working capital and the availability of credit is:

4. Availability of Credit from suppliers reduces working capital requirement. When suppliers provide credit terms, it allows a company to delay payment for goods or services received, effectively extending the time it has to use its own funds (working capital). This, in turn, can reduce the immediate need for a higher level of working capital.

Certainly, here are explanations for the other statements:

1. Availability of Credit from suppliers increases working capital requirement: This statement is not true. When suppliers provide credit, it means the company doesn't have to pay for goods or services immediately, which reduces the immediate working capital requirement. It can actually have the opposite effect.

2. allowing to customers reduces working capital requirement: This statement is generally not true. Allowing credit to customers means that the company is providing goods or services without immediate payment, which can tie up working capital. While it may lead to increased sales, it can increase the need for working capital to cover expenses in the short term.

3. Allowing only cash selling to customers increases working capital requirement: This statement is generally true. When a business only allows cash sales, it means customers must pay for goods or services immediately, which can increase the company's working capital since it receives cash upfront. However, it may limit sales volume and growth opportunities.

So, among the provided statements, statement 4 is the accurate one. Availability of credit from suppliers can reduce the immediate working
capital requirement for a business.