The Green Fiddle increased its operating cycle from 139 days to 146 days while the cash cycle decreased by 3 days. How have these changes affected the accounts payable period?

Question

Quizplus · Accepted Answer

The operating cycle increased by 7 days (146 - 139), while the cash cycle decreased by 3 days. The accounts payable period is the difference between the operating cycle and the cash cycle. Therefore, the accounts payable period must have increased by 10 days (7 + 3).

The Green Fiddle Increased Its Operating Cycle from 139 Days