Question 1

If the accounts payable turnover is 5.4,what is the days' payable outstanding? (Round your answer to the nearest day. )
A)58 days
B)18 days
C)68 days
D)55 days

Accepted Answer

365 / 5.4 = 68 days

Question 2

If Cost of Goods Sold is $240,000,beginning inventory is $57,000,and ending inventory is $40,000,then the purchases from suppliers (assume all on account)would be:
A)$337,000.
B)$257,000.
C)$223,000.
D)$240,000.

Accepted Answer

$240,000 + $40,000 - $57,000 = $223,000.

Question 3

On December 31st,Goliath Corporation has cost of goods sold of $114,000,ending inventory is $15,000,beginning inventory is $18,000;and average accounts payable is $25,000.
Required:
1.What is the accounts payable turnover (take all answers to two decimal places)?
2.What is the accounts payable turnover in days (take to the nearest day)?

Accepted Answer

The answer of On December 31st,Goliath Corporation has cost of...

Question 4

The accounts payable turnover is calculated by purchases from suppliers divided by:
A)average accounts payable
B)beginning accounts payable.
C)ending accounts payable.
D)average accounts receivable.

Accepted Answer

The accounts payable turnover ratio measures how many times a company pays off its accounts payable in a given period. It is calculated by dividing the total purchases made from suppliers by the average accounts payable balance during that time. Therefore, the correct choice is A - average accounts payable.

Question 5

Which number is needed in calculating the accounts payable turnover that is NOT normally reported on the financial statements?
A)purchases from suppliers
B)cost of goods sold
C)ending inventory
D)beginning inventory

Accepted Answer

Purchases from suppliers is not normally reported on the financial statements. It is usually calculated by adjusting the cost of goods sold for changes in inventory levels.

Question 6

On December 31st,Datton,Inc.has cost of goods sold of $550,000,ending inventory is $102,000,beginning inventory is $120,000;and average accounts payable is $114,000.What is the accounts payable turnover? (Round your answer two decimal places. )
A)4.98
B)7.77
C)4.67
D)2.88

Accepted Answer

$550,000 + $102,000 - $120,000 = $532,000 / $114,000 = 4.67

Question 7

On December 31st,Datton,Inc.has cost of goods sold of $550,000,ending inventory is $112,000,beginning inventory is $129,000;and average accounts payable is $107,000.What is the accounts payable turnover expressed as days? (Round any intermediary calculations to two decimal places,and round your final answer to the nearest day. )
A)69
B)73
C)44
D)126

Accepted Answer

$550,000 + $112,000 - $129,000 = $533,000 / $107,000 = 4.98
365/4.98 = 73 days

Question 8

On December 31st,Baxtor,Inc.has cost of goods sold of $310,000,ending inventory is $18,000,beginning inventory is $23,000;and average accounts payable is $89,000.What is the accounts payable turnover expressed as days?
A)106
B)103
C)74
D)121

Accepted Answer

$310,000 + $18,000 - $23,000 = $305,000 / $89,000 = 3.43
365/3.43 = 106 days

Question 9

A note is a written promise to pay a certain amount of money at a given date in the future along with interest.

Accepted Answer

This is the definition of a note.

Question 10

The accounts payable turnover expressed in days is 365 divided by:
A)accounts payable turnover.
B)beginning accounts payable.
C)ending accounts payable.
D)average accounts payable.

Accepted Answer

The accounts payable turnover in days, often referred to as the payables turnover days or creditor days, is calculated by dividing 365 days by the accounts payable turnover ratio. This ratio measures how quickly a company pays off its suppliers. The formula does not directly involve beginning, ending, or average accounts payable but rather uses the turnover ratio itself to determine the average number of days the company takes to pay its accounts payable.

Question 11

If Cost of Goods Sold is $300,000,beginning inventory is $29,000,and ending inventory is $30,000,then the purchases from suppliers (assume all on account)would be:
A)$359,000.
B)$299,000.
C)$301,000.
D)$59,000.

Accepted Answer

$300,000 + $30,000 - $29,000 = $301,000.

Question 12

Typically,the hard part about computing the accounts payable turnover is getting the:
A)purchases from suppliers.
B)beginning inventory.
C)ending inventory.
D)average inventory.

Accepted Answer

The accounts payable turnover formula is calculated by dividing the total purchases by the average accounts payable. Therefore, the key information needed is the total purchases from suppliers to calculate the turnover ratio. The other options (beginning inventory, ending inventory, and average inventory) are not relevant to calculating the accounts payable turnover.

Question 13

A typical credit period for payment is:
A)10 days.
B)15 days.
C)30 days.
D)45 days.

Accepted Answer

A typical credit period for payment is 30 days. While some companies may have shorter or longer credit periods, the industry standard is usually around 30 days.

Question 14

On December 31st,Smith Corporation has cost of goods sold of $124,000,ending inventory is $25,000,beginning inventory is $28,000;and average accounts payable is $15,000.
Required:
1.What is the accounts payable turnover (take all answers to two decimal places)?
2.What is the accounts payable turnover in days (take to the nearest day)?

Accepted Answer

The answer of On December 31st,Smith Corporation has cost of...

Question 15

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then:
A)an adjustment still must be made for the difference to reduce or increase purchases.
B)it should just be noted in the footnotes.
C)it is not necessary to adjust for the inventory.
D)an adjustment still must be made for the difference to reduce cost of goods sold.

Accepted Answer

Accounts payable turnover ratio is calculated by dividing purchases by average accounts payable. It is not necessary to adjust for the inventory if there is no material difference between beginning and ending inventory as inventory does not affect accounts payable amount. Therefore, choice (C) is the correct answer.

Question 16

If the accounts payable turnover is 7.9,what is the days' payable outstanding? (Round your answer to the nearest day. )
A)46 days
B)16 days
C)56 days
D)33 days

Accepted Answer

365 / 7.9 = 46 days

Question 17

How do you compute the purchases from suppliers:
A)Cost of goods sold + ending inventory + beginning inventory.
B)Cost of goods sold - ending inventory - beginning inventory.
C)Cost of goods sold + ending inventory - beginning inventory.
D)Cost of goods sold - ending inventory + beginning inventory.

Accepted Answer

The purchases from suppliers can be computed by adding the cost of goods sold to the ending inventory and then subtracting the beginning inventory. This is because purchases are the total amount of goods acquired during a period, which includes the cost of goods sold as well as the change in inventory levels. Therefore, the formula to calculate purchases is: 
Purchases = Cost of goods sold + Ending inventory - Beginning inventory. 
Option C is the correct formula that follows this logic.

Question 18

Short-term notes payable are notes payable due in more than one year.

Accepted Answer

Short-term notes payable are notes payable due in one year or less.

Question 19

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.
A)similar
B)unavailable
C)drastically different
D)noncomparable

Accepted Answer

Accounts payable turnover is calculated by dividing the total purchases or cost of goods sold by the average accounts payable balance during the period. If there is not a material difference in inventory, it means that the company's purchases and cost of goods sold are approximately equal. Therefore, whether purchases or cost of goods sold are used in the calculation, the accounts payable turnover will be similar.

Question 20

On December 31st,Baxtor,Inc.has cost of goods sold of $380,000,ending inventory is $12,000,beginning inventory is $28,000;and average accounts payable is $89,000.What is the accounts payable turnover? (Round your answer two decimal places. )
A)4.45
B)5.72
C)3.82
D)4.09

Accepted Answer

$380,000 + $12,000 - $28,000 = $364,000 / $89,000 = 4.09

Quiz 8: Current and Contingent Liabilities

If the accounts payable turnover is 5.4,what is the days' payable outstanding? (Round your answer to the nearest day. )

If Cost of Goods Sold is $240,000,beginning inventory is $57,000,and ending inventory is $40,000,then the purchases from suppliers (assume all on account) would be:

The accounts payable turnover is calculated by purchases from suppliers divided by:

Which number is needed in calculating the accounts payable turnover that is NOT normally reported on the financial statements?

On December 31st,Datton,Inc.has cost of goods sold of $550,000,ending inventory is $102,000,beginning inventory is $120,000;and average accounts payable is $114,000.What is the accounts payable turnover? (Round your answer two decimal places. )

On December 31st,Baxtor,Inc.has cost of goods sold of $310,000,ending inventory is $18,000,beginning inventory is $23,000;and average accounts payable is $89,000.What is the accounts payable turnover expressed as days?

A note is a written promise to pay a certain amount of money at a given date in the future along with interest.

The accounts payable turnover expressed in days is 365 divided by:

If Cost of Goods Sold is $300,000,beginning inventory is $29,000,and ending inventory is $30,000,then the purchases from suppliers (assume all on account) would be:

Typically,the hard part about computing the accounts payable turnover is getting the:

A typical credit period for payment is:

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then:

If the accounts payable turnover is 7.9,what is the days' payable outstanding? (Round your answer to the nearest day. )

How do you compute the purchases from suppliers:

Short-term notes payable are notes payable due in more than one year.

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.

On December 31st,Baxtor,Inc.has cost of goods sold of $380,000,ending inventory is $12,000,beginning inventory is $28,000;and average accounts payable is $89,000.What is the accounts payable turnover? (Round your answer two decimal places. )