Which of the Following Statements Incorrectly Describes the Accounts Payable

question 31

Multiple Choice

Which of the following statements incorrectly describes the accounts payable turnover ratio?

• A)A high ratio indicates that suppliers are being paid in a timely manner.
• B)The ratio increases when inventory is sold on account regardless of the sales price.
• C)The ratio can be manipulated by aggressively paying off accounts payable at year-end.
• D)The ratio is not affected by the choice of inventory accounting methods.

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Definitions:

Senior Executives

Top-level managers who are responsible for the overall direction and performance of a company.

Criminally Prosecuted

The process of charging someone with a crime and conducting a trial to determine guilt.

Unrealized Profits

Gains on investments that have increased in value but the increase has not been realized through selling.

Economic Decisions

Choices made by individuals, businesses, or governments based on the allocation of scarce resources with the aim of maximizing benefits and minimizing costs.