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WAEC Financial Accounting 2014 Question 35

Question 35

Interpretation of Accounts

The accounting ratio used to measure the average number of days for which suppliers remain unpaid is

  1. A.stock turnover.
  2. B.creditors' payment period.
  3. C.debtors collection period.
  4. D.return on capital employed.
Show the answer and explanation

Answer: B (creditors' payment period.)

Explanation

The creditors' payment period shows how many days, on average, the business takes to pay its suppliers.