The __________is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.
A) cash conversion cycle
B) average payment period
C) average collection period
D) average age of inventory

Question

Quizplus · Accepted Answer

The average payment period measures the amount of time it takes for a company to pay its creditors after a purchase has been made on account. It is calculated by dividing accounts payable by the average daily credit purchases. This time period is important for the company to manage its working capital and maintain good relationships with its suppliers.

The __________Is the Time Period That Elapses from the Point