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Asked by Jennifer Forest on May 16, 2024

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Which of the following is the best definition of accounts payable period?

A) The time between receipt of inventory and payment for it.
B) A secured short-term loan that involves either the assignment or factoring of receivables
C) The time between sale of inventory and collection of the receivable.
D) Costs that rise with increases in the level of investment in current assets.
E) A forecast of cash receipts and disbursements for the next planning period.

Accounts Payable Period

The average number of days it takes for a business to pay its suppliers.

Receipt Of Inventory

The process of receiving goods or materials into stock, typically recorded at the time of delivery, impacting both inventory levels and accounts payable.

Payment For It

This term refers to the act of disbursing money in exchange for goods or services.

  • Identify the crucial function of the accounts payable period in overseeing cash flows.
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Taylor CollierMay 16, 2024
Final Answer :
A
Explanation :
The accounts payable period refers to the amount of time a company takes to pay off its suppliers after receiving goods or services. This is best described by option A, as it specifically mentions the time between receiving inventory and paying for it, which directly relates to accounts payable.

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