A company has days' payable outstanding of 70 days. If credit terms of purchases are 2/10, net 30, is the company paying accounts payable on a timely basis?
A)Yes, days' payable outstanding exceeds the net period of 30 days.
B)Yes, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
C)No, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
D)There is not enough information to make an assessment.

Question

Quizplus · Accepted Answer

The company is taking 70 days to pay, which exceeds both the discount period of 10 days and the net period of 30 days, indicating they are not paying on time.

A Company Has Days' Payable Outstanding of 70 Days