The following information is available for David, a sole trader, for the 20X4 financial year: What was the trade payables' turnover period in days (to one decimal place)?
A)47.2 days
B)12.7 days
C)46.5 days
D)33.5 days

Question

The following information is available for David, a sole trader, for the 20X4 financial year:  What was the trade payables' turnover period in days (to one decimal place)?
A)47.2 days 
B)12.7 days 
C)46.5 days 
D)33.5 days

Quizplus · Accepted Answer

The trade payables' turnover period can be calculated using the formula:
Trade Payables Turnover Period = (Trade Payables / (Credit Purchases / 365))
= (9,400 / (77,000 / 365))
= 44.7 days (rounded to one decimal place)
Therefore, the answer is C) 46.5 days, which is the closest option to the calculated answer.

The Following Information Is Available for David, a Sole Trader