Accounting 0452 · IGCSE · Calculation and understanding of accounting ratios

Calculation and understanding of accounting ratios — practice question

A business has a trade payables turnover of $36$ days. What do these $36$ days indicate?

  • Athe average number of days before the business purchases further goods on credit
  • Bthe average number of days taken by the business to pay its credit suppliers
  • Cthe average number of days the business is allowed by credit suppliers to pay for goods
  • Dthe average number of days the business takes to sell goods purchased on credit

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