If accounts payable are paid 10 times a year, what, on average, is the accounts payable turnover period in days?

Question

Quizplus · Accepted Answer

The accounts payable turnover period in days can be calculated by dividing the number of days in a year (365) by the accounts payable turnover ratio.

Accounts payable turnover ratio = Cost of goods sold / Average accounts payable

Assuming a cost of goods sold of $365,000 and an average accounts payable of $36,500, the accounts payable turnover ratio would be:

365,000 / 36,500 = 10

Therefore, the accounts payable turnover period in days would be:

365 / 10 = 36.5 days

Therefore, the best choice is C.

If Accounts Payable Are Paid 10 Times a Year, What