The accounting ratio used to measure the averag... - WAEC Accounting 2014 Question
The accounting ratio used to measure the average number of days for which suppliers remain unpaid is
A
stock turnover
B
creditor's payment period
C
debtors collection period
D
return on capital employed
correct option: b
The Creditor (or payables) days number is a similar ratio to debtor days and it gives an insight into whether a business is taking full advantage of trade credit available to it. Creditor days estimates the average time it takes a business to settle its debts with trade suppliers.
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