Your Accountant Suspects a Mistake in the Computation of the Payables

question 36

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 payable period =

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Definitions:

Business Combination

A transaction or event where an acquirer gains control over one or more businesses, often through the acquisition of equity interests or assets.

Common Stock

Shares entitling their holders to dividends that vary in amount and may even be missed, depending on the fortunes of the company.

Fair Value

A financial accounting term referring to the estimated market value of an asset, liability, or company.

Par Value

The nominal or face value of a bond, stock, or other financial instrument, originally intended to be the minimum price at which the securities could be sold.