Accounting for IGCSE & O level - Advanced Principles (Section 5 - No. 17)
What does an increase in the trade payables period signal?
The business is taking longer to pay its suppliers.
The business is paying its suppliers more quickly.
The business is making less purchases on credit.
The business is experiencing financial difficulty.
Explanation
An increase in the trade payables period means a business is taking longer to pay its suppliers, which may be beneficial to the business as it helps to keep cash for longer.
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