A company had accounts payable at the beginning of the year of $63,000 and at the end of the year of $69,000.Inventory at the beginning of the year was $102,000 and at the end of the year $118,000.Cost of sales for the year was $600,000.What was their accounts payable turnover ratio closest too?
A)5.5 times
B)9.1 times
C)9.3 times
D)12.4 times

Question

Quizplus · Accepted Answer

The accounts payable turnover ratio is calculated as Cost of Sales divided by Average Accounts Payable. Average Accounts Payable = ($63,000 + $69,000) / 2 = $66,000. Therefore, the turnover ratio = $600,000 / $66,000 = 9.09, which is closest to 9.3 times.

A Company Had Accounts Payable at the Beginning of the Year