O-LevelAccountingAnalysis and interpretation7707/11 · May/June 2022 · Q341 Mark

A trader is considering selling goods on credit to a new customer. What could be calculated from the customer's financial statements to indicate the time normally taken to pay for goods purchased on credit?

Acurrent ratio

Bliquid (acid test) ratio

Ctrade payables turnover

Dtrade receivables turnover

✓ Correct answer

C: trade payables turnover

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2022 Paper 1 Variant 1, question 34.

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