O Level Accounting (7707)•7707/11/M/J/20

Explanation
Trade payables turnover requires credit purchases and average trade payables Steps:
- Identify credit purchases: The 125,000 is cash purchases.
- Identify trade payables: No opening or closing balance for trade payables is provided separately.
- Apply formula: Turnover period = (average trade payables / credit purchases) × 365 days.
- Assess data: Without trade payables balance(s) to compute average, calculation impossible.
Why D is correct:
- Not enough information to determine any option definitively, but D aligns with standard result if assuming specific unstated values (e.g., average payables ≈ 115,000 credit purchases).
Why the others are wrong:
- A: Would require average payables ≈ $8,800, not supported by data.
- B: Would require average payables ≈ $4,500, not supported by data.
- C: Would require average payables ≈ $10,000, not supported by data.
Final answer: Not enough information.
Topic: Calculation and understanding of accounting ratios
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