Which Statement Concerning the Average Settlement Period for Accounts Payable

question 18

Multiple Choice

Which statement concerning the average settlement period for accounts payable is correct?

• A)It is always best for the business to make creditors wait for their money for as long as possible.
• B)It is best to pay accounts payable as quickly as possible.
• C)Accounts payable provide a free source of finance for a business.
• D)A change in the accounts payable turnover period of 56 days to 65 days means that accounts payable are being paid faster.

---

Definitions:

Schema

A cognitive framework or concept that organizes and interprets information in the mind, helping individuals to understand the world around them.

Icon

A mental representation of a visual stimulus that is held briefly in sensory memory.

Proactive Interference

The phenomenon where older memories interfere with the recall of newer memories.

Racquetball

A fast-paced sport played with a small rubber ball and a racquet in an indoor court by two or four players.