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

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Definitions:

Trade Agreement

A treaty or pact between two or more nations that outlines how they will work together to ensure mutual benefits in trade.

Royalty

A payment made to the owner of certain types of property, such as patents or copyrights, for the right to use that property.

International Monetary Fund (IMF)

Organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation.

Developed Countries

Nations with advanced economic systems, higher standards of living, and well-established infrastructures, often characterized by high Gross Domestic Product (GDP) per capita.