Bercraft Industries Has an Average Accounts Payable Balance of $280,000

question 116

Multiple Choice

Bercraft Industries has an average accounts payable balance of $280,000.Its average annual cost of goods sold is $4,780,000.It receives terms of 1/20 net 40 from its suppliers.Is Bercraft 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.
• E)No,since it,on average,does not make payment before it is due.

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Definitions:

U.S. Farm Subsidies

Government payments and financial support to farmers in the United States, aimed at stabilizing agriculture markets and incomes.

U.S. Farm Policy

A collection of laws and regulations that aim to support the agricultural sector in the United States through various means such as subsidies, price supports, and conservation initiatives.

Overallocation

The distribution of more resources or a larger share than is sustainable or equitable in a specific context.

Agriculture

The practice of cultivating the soil, producing crops, and raising livestock for the purpose of providing food, fiber, medicinal plants, and other products to sustain and enhance life.