Buck or Less Stores had a beginning accounts payable balance of $269,000 and an ending accounts payable balance of $327,000. Sales for the period were $3.4 million and costs of goods sold were $2.5 million. What is the payables turnover rate?

Question

Quizplus · Accepted Answer

The payables turnover rate is calculated by dividing the cost of goods sold by the average accounts payable. The average accounts payable is ($269,000 + $327,000) / 2 = $298,000. Therefore, the payables turnover rate is $2,500,000 / $298,000 = 8.39 times.

Buck or Less Stores Had a Beginning Accounts Payable Balance