Which function reflects the expenditure cycle?

The expenditure cycle encompasses all of the processes involved in acquiring goods and services for a business. This cycle includes activities such as purchasing, receiving, and paying for merchandise, as well as managing resources and inventory levels. The selected choice, inventory management, plays a critical role within the expenditure cycle because it involves tracking and controlling the stock of goods held by the business.

Effective inventory management ensures that a company can meet its demand for products without overstocking, which can lead to increased costs. It also directly influences purchasing decisions, as the information about inventory levels helps determine when and how much to reorder from suppliers. Thus, inventory management is integral to the expenditure cycle, reflecting the activities related to procuring inventory and managing it efficiently.

The other choices relate to different business functions that do not specifically address the expenditure cycle. Sales forecasting is primarily concerned with predicting customer demand and does not directly deal with the procurement of goods. Customer relationship management focuses on managing relationships and interactions with current and potential customers, not on the acquisition of resources. Financial reporting involves communicating financial information to stakeholders and does not inherently fall under the activities of the expenditure cycle. Therefore, inventory management is the most representative of the expenditure cycle's functions.