IAS 1 Payables Collection Flashcards
1
Q
What represents an increase in payable days?
A
Could indicate a business is having cash flow difficulties and is delaying payments using suppliers as a free source of finance
2
Q
Why is it important a business pays within agreed credit limits?
A
To avoid conflict with suppliers
3
Q
What if payable days are reducing?
A
indicates suppliers are being paid more quickly
4
Q
A reduction in payables collection meaning?
A
Credit terms being tightened or taking advantage of early settlement discounts being offered
