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:

Carl Rogers

An influential American psychologist who developed client-centered therapy and emphasized the importance of a positive self-concept.

Affiliation Motivation

A psychological concept referring to the drive to relate to people on a social basis.

Neuroscience

The scientific study of the nervous system, aiming to understand the biological basis of behavior, thought, and emotion.

Unconscious

The part of the mind that houses thoughts, memories, and desires not within the realm of conscious awareness, influencing behavior and perceptions.