Given a Fixed Level of Sales and a Constant Profit

question 35

Multiple Choice

Given a fixed level of sales and a constant profit margin,an increase in the accounts payable period can result from:

• A)an increase in the cost of goods sold account value.
• B)an increase in the ending accounts payable balance.
• C)an increase in the cash cycle.
• D)a decrease in the operating cycle.
• E)a decrease in the average accounts payable balance.

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Definitions:

Closing Accounts

The process of finalizing all ledger accounts to prepare financial statements at the end of an accounting period.