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

question 31

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.
• E)No,since it,on average,does not make payment before it is due.

---

Definitions:

Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in the price of that good, showcasing consumer sensitivity to price changes.

Political Lobbying

The act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies.

Marginal Wage Cost Curves

A graphical representation showing how the wage cost changes when an additional unit of labor is hired.

Monopsonists

Entities or individuals that are the sole buyers in a market, wielding significant power over prices and terms of purchase.