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      Question

      ABC Ltd has made purchases of Rs.100,000 during the

      year. The balance sheet shows an average accounts payable balance of Rs12,000. ABC Ltd payable payment period is closest to:
      A 37 days Correct Answer Incorrect Answer
      B 44 days Correct Answer Incorrect Answer
      C 52 days Correct Answer Incorrect Answer
      D 45 days Correct Answer Incorrect Answer
      E 25 days Correct Answer Incorrect Answer

      Solution

                 Payables Turnover = Purchases/ average payables = 100000/12000             8.33             Payables payment period = 365/8.33 = 43.8 ~ 44 days

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