Ally Manufacturing Has an Average Accounts Payable Balance of $420

question 71

Multiple Choice

Ally Manufacturing has an average accounts payable balance of $420 000. Its average annual cost of goods sold is $10 220 000. It receives terms of 2/15 net 30 from its suppliers. Is Ally managing its accounts payable 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 payment due 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:

Nonaromatic

Organic compounds that do not meet the criteria for aromaticity, lacking the special stability of aromatic systems.

Pyridine

A basic nitrogen-containing heterocyclic aromatic compound, resembling benzene but with one CH group replaced by a nitrogen atom.

Pyrrole

An aromatic heterocyclic organic compound, consisting of a five-membered ring with one nitrogen atom. It is the foundation for many natural and synthetic compounds including pharmaceuticals.

Aromatic

Refers to a class of compounds that contain one or more planar ring structures with delocalized π-electron systems, leading to stable and often fragrant molecules.