Which of the following measures the number of days that the firm holds accounts payable before it has to extend cash to buy raw materials?
A)Accounts receivable turnover
B)Average collection period
C)Average payment period
D)Accounts payable turnover

Question

Quizplus · Accepted Answer

The average payment period measures the number of days that a firm holds accounts payable before having to extend cash to buy raw materials. A lower average payment period indicates more efficient management of accounts payable, as the firm is able to hold onto its cash for a longer period of time. The other answer choices measure different aspects of a firm's financial operations.

Which of the Following Measures the Number of Days That