LeokLee Industries Has an Average Accounts Payable Balance of $720,000

question 12

Multiple Choice

LeokLee Industries has an average accounts payable balance of $720,000. Its average annual cost of goods sold is $8,760,000. It receives terms of 1/10 net 30 from its suppliers. Is LeokLee 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.

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Definitions:

Blood Chemistry Test

A lab analysis performed on a blood sample to measure various chemicals and substances in the bloodstream, aiding in diagnosis.

Heart Rate

The number of heartbeats per unit of time, typically expressed as beats per minute (bpm), indicating the heart's efficiency in pumping blood throughout the body.

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The condition resulting from excessive loss of body water, impairing normal bodily functions.