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Concept introduction:
Days’ payable outstanding:
Days’ payable outstanding tells about the number of days a company takes to repay its’ creditors. In other words we can say that it shows relationship between accounts payable and cost of goods sold. Low number of days shows that a company is paying creditors quickly but higher the number of days shows that a company is not able to pay creditors quickly.
Requirement 1:
Days’ payable outstanding for the current year.
Concept introduction:
Days’ payable outstanding:
Days’ payable outstanding tells about the number of days a company takes to repay its’ creditors. In other words we can say that it shows relationship between accounts payable and cost of goods sold. Low number of days shows that a company is paying creditors quickly but higher the number of days shows that a company is not able to pay creditors quickly.
Requirement 2:
Days’ payable outstanding for the prior year.
Concept introduction:
Days’ payable outstanding:
Days’ payable outstanding tells about the number of days a company takes to repay its’ creditors. In other words we can say that it shows relationship between accounts payable and cost of goods sold. Low number of days shows that a company is paying creditors quickly but higher the number of days shows that a company is not able to pay creditors quickly.
Requirement 3:
Did days’ payable outstanding increase or decrease from the prior year?
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Chapter C Solutions
Managerial Accounting
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