The Payables Turnover Ratio Indicates

question 5

Multiple Choice

The payables turnover ratio indicates:

• A)How many times a year a firm is purchasing goods from its suppliers
• B)How many times a year a firm's customers are paying their account
• C)How long a firm delays payment to its suppliers
• D)How many times a year a firm is paying its suppliers

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Definitions:

Internal Control

A process designed to ensure the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations.

Petty Cash Vouchers

Documents used to manage and record small, usually incidental, expenses paid out in cash from a designated petty cash fund.

Nontrade Receivables

Nontrade receivables are amounts owed to a company that are not related to the sale of goods or services, such as loans and advances given.

Advances to Subsidiary

Funds provided by a parent company to its subsidiary as an intra-company loan or for investment purposes.