Question

Ally Manufacturing has an average accounts payable balance of​ $420,000. Its average annual cost of goods sold is​ $10,220,000. It receives terms of​ 2/15 net 30 from its suppliers. Is Ally managing its accounts payables​ well? A. ​Yes, since​ it, on​ average, chooses not to take the​ discount, but pays when payment is due. B. ​Yes, since​ it, on​ average, takes the​ discount, and pays at the end of the discount period. C. ​Yes, since​ it, on​ average, stretches payment beyond the due payment date. D. ​No, since​ it, on​ average, does not take advantage of the discount period and pays well before payment is due.

Answer 1

Answer:

B

Explanation:

Since​ it, on​ average, takes the​ discount, and pays at the end of the discount period.