The cash benefit arises to B Airlines by the increase of accounts payable period. Payable Period: The time period starts when the company purchase raw material from supplier and pay cash back to the supplier this time period is the payable period. Generally large companies lengthen payable period to get the benefit of cash.

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Chapter 26, Problem 12CQ

Summary Introduction

To explain: The cash benefit arises to B Airlines by the increase of accounts payable period.

Payable Period:

The time period starts when the company purchase raw material from supplier and pay cash back to the supplier this time period is the payable period. Generally large companies lengthen payable period to get the benefit of cash.

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