Ally Manufacturing Has an Average Accounts Payable Balance of $420,000

question 32

Multiple Choice

Ally Manufacturing has an average accounts payable balance of $420,000.Its average annual cost of goods sold is $10,220,000.It receives terms of 2/15 net 30 from its suppliers.Is Ally 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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Ibuprofen

A nonsteroidal anti-inflammatory drug (NSAID) commonly used to relieve pain, reduce inflammation, and lower fever.

Nephron

The nephron is the basic structural and functional unit of the kidney, essential for water and electrolyte balance and waste excretion.