Question

A company reports purchases of $388,000​, a beginning accounts payable balance of $27,000​, and an ending accounts payable balance of $48,000. All purchases were on account. The​ company's accounts payable turnover would be closest​ to:______

Answer 1

Answer:

11.09

Explanation:

First, we need to determine the average accounts payable and its given as;

Average accounts payable = (Beginning accounts payable + Closing accounts payable) / 2

= ($27,000 + $48,000) / 2

= $35,000

Purchases = $388,000

Accounts payable turnover is computed as;

= Purchases ÷ Average accounts payable

= $388,000 ÷ $35,000

= 11.09

Therefore, the company's account payable turnover would be closest to 11.09