Accounts payable turnover measures:

A Sales efficiency

B How quickly a company pays its suppliers, calculated as cost of goods sold divided by average accounts payable

C Revenue collection speed

D Inventory speed

✓ Correct Answer: Option B

AP Turnover = COGS / Avg AP. Higher ratio = paying suppliers faster. Days Payable Outstanding (DPO) = 365/AP Turnover. Cash management: balance supplier relations vs preserving cash.

💡 Why is B) the correct answer?

The correct answer to the question "Accounts payable turnover measures:" is Option B: How quickly a company pays its suppliers, calculated as cost of goods sold divided by average accounts payable.

The other options — A) Sales efficiency, C) Revenue collection speed, D) Inventory speed — are incorrect for this Pre-MBA Exam Prep question. As explained above: AP Turnover = COGS / Avg AP. Higher ratio = paying suppliers faster. Days Payable Outstanding (DPO) = 365/AP Turnover. Cash management: balance supplier relations vs preserving cash.

📚 About This Pre-MBA Exam Prep Practice Question

This 2-level Pre-MBA Exam Prep question from the Finance topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free Pre-MBA Exam Prep practice test or use flashcards for spaced repetition review.

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Accounts payable turnover measures:

✓ Correct Answer: Option B

📚 About This Pre-MBA Exam Prep Practice Question

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