ACCA F3 ACCOUNTS PAYABLE PERIOD

From the following information regarding the year to 31 August 20x6, what is the accounts payable payment period? You should calculate the ratio using purchases as the denominator.

Sales revenue	100,000
Cost of sale	80,000
Opening inventory	9,000
Closing inventory	1,000
Trade accounts payable at 31 August 20x6	10,000

Suggested solutions:

Cost of sales	80,000
Add Closing inventory	1,000
Minus Opening inventory	9,000
= Purchase	72,000

Working:

Trade accounts payable / purchase X 365 days

= 10,000 / 72,000 X 365 days

= 51 days

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