The Down Towner Has Sales of $642,000 and Average Accounts

question 20

Multiple Choice

The Down Towner has sales of $642,000 and average accounts payable of $56,400.The cost of goods sold is equivalent to 68 percent of sales.How long does it take Down Towner to pay its suppliers?

• A)32.07 days
• B)43.45 days
• C)40.69 days
• D)47.16 days
• E)31.85 days

---

Definitions:

Income-Splitting

A tax strategy used by families or partnerships to divide income amongst members to lower the overall tax liability by utilizing lower tax brackets.

Back Pay

Compensation owed to an employee for a past period, typically due to underpayment or wage disputes.

Tax Purposes

Motivations or reasons related to the calculation, payment, or avoidance of taxes.

Illegal Contracts

Agreements that are not enforceable by law due to their involvement in illegal activities or because they contravene public policy.