Question

Which one of the following is the length of time that a retailer owes its supplier for an inventory purchase?

a.Inventory period
b.Accounts receivable period
c.Accounts payable period
d.Operating cycle
e.Cash cycle

Answer 1

The accounts payable period is the length of time a retailer owes its supplier for inventory purchases, and it's a part of the cash conversion cycle.

Step-by-step explanation:

The length of time that a retailer owes its supplier for an inventory purchase is known as the accounts payable period. This period reflects the time between the receipt of inventory and the payment for that inventory. The accounts payable period is a critical component of a company’s cash conversion cycle, which measures how long it takes for a company to convert its investments in inventory and other resources into cash flow from sales.