Bercraft Industries Has an Average Accounts Payable Balance of $280,000

question 116

Multiple Choice

Bercraft Industries has an average accounts payable balance of $280,000.Its average annual cost of goods sold is $4,780,000.It receives terms of 1/20 net 40 from its suppliers.Is Bercraft managing its accounts payables well?

• A)Yes,since it,on average,chooses not to take the discount,but pays when payment is due.
• B)Yes,since it,on average,takes the discount,and pays at the end of the discount period.
• C)Yes,since it,on average,stretches payment beyond the due payment date.
• D)No,since it,on average,does not take advantage of the discount period and pays well before payment is due.
• E)No,since it,on average,does not make payment before it is due.

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Definitions:

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Financial awards covering the entire cost of tuition for students, often based on academic merit, need, or other criteria, provided by educational institutions or donors.

Comparative Advantage

The ability of a country or individual to produce a particular good or service at a lower opportunity cost than others, leading to more efficient international trade.

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Focusing one’s efforts in a specific domain or area of expertise, often to increase efficiency and skill.

Greater Quantity

A higher amount or number of something, usually used in reference to the production or supply of goods.