A retailer can increase its accounts payable to net sales ratio by ________.
A) buying in large quantities
B) increasing its inventory turnover
C) paying accounts payable early to receive cash discounts
D) demanding longer payment terms from vendors

Question

Quizplus · Accepted Answer

By demanding longer payment terms from vendors, a retailer can decrease its accounts payable turnover, resulting in an increase in its accounts payable to net sales ratio. This would be the best choice among the options given as it directly addresses the desired outcome. Buying in large quantities and increasing inventory turnover may not directly impact the ratio, and paying accounts payable early to receive cash discounts may actually decrease the ratio as it can decrease accounts payable balances.

A Retailer Can Increase Its Accounts Payable to Net Sales