The number of days' payable is determined by dividing
A)the number of days in a year by the payables turnover.
B)the number of days in a year by average accounts payable.
C)cost of goods sold by average accounts payable.
D)inventory by average accounts payable.

Question

Quizplus · Accepted Answer

The number of days' payable, also known as days payable outstanding (DPO), is calculated by dividing the number of days in a year by the payables turnover ratio. This metric indicates how long it takes a company to pay its invoices from suppliers and creditors.

The Number of Days' Payable Is Determined by Dividing