Economics · Auditing
Which of the following scenarios would correctly explain why Chester Co's payables payment period has increased from 45 days in 20X4 to 66 days in 20X5?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Chester Co took advantage of extended credit terms offered by a new supplier in respect of a large order which it had fully settled by the year-en d
- 2Chester Co purchased an unusually high level of goods in February 20X5 to satisfy a large order and had not paid for those goods by the year-end✓
- 3Chester Co obtained a trade discount from one of its biggest suppliers which has reduced the amount owed to that supplier by 10% in the year
- 4Chester Co received a prompt payment discount from one of its suppliers for the first time in 20X5
Correct answer
Chester Co purchased an unusually high level of goods in February 20X5 to satisfy a large order and had not paid for those goods by the year-end
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