The accounting ratio used to measure the average number of days for which suppliers remain unpaid is
A. stock turnover B. creditor's payment period C. debtors collection period D. return on capital employed
Correct Answer: B
Explanation
The Creditor (or payables) days number is a similar ratio to debtor days and it gives an insight into whether a business is taking full advantage of trade credit available to it. Creditor days estimates the average time it takes a business to settle its debts with trade suppliers.
