Your Accountant Suspects a Mistake in the Computation of the Payables

question 1

Multiple Choice

Your accountant suspects a mistake in the computation of the payables period,which has been reported at 54.75 days.Calculate the correct payables period,given the following: annual sales = $1,200,000,annual cost of goods sold = $700,000,average accounts payable = $105,000.

• A) 31.94 days
• B) 54.75 days
• C) 179.58 days
• D) 212.92 days

---

Definitions:

Traded

The act of buying or selling securities, commodities, or other financial instruments on financial markets.

Put-Call Parity

A fundamental principle in options pricing that establishes a specific relationship between the prices of European put and call options with the same strike price and expiration date.

European Put Option

A financial contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price on the expiration date.

Exercise Price

The price at which the holder of an option can buy (for a call option) or sell (for a put option) the underlying security.