What is accounts payable turnover?
A)A ratio calculated as Purchases divided by ending balance in Accounts Payable.
B)A ratio calculated as Cost of Goods Sold divided by average Accounts Payable.
C)A ratio calculated as Purchases divided by average Accounts Payable.
D)B and C.

Question

Quizplus · Accepted Answer

The accounts payable turnover ratio can be calculated in two common ways: one using Cost of Goods Sold (COGS) divided by the average Accounts Payable (option B), and another using Purchases divided by the average Accounts Payable (option C). Both methods are used to assess how quickly a company pays off its suppliers.

What Is Accounts Payable Turnover