RMA Credit Risk Certification Practice Exam

This question tests how long, on average, a company takes to pay its suppliers. Days in A/P is found by multiplying the ratio of Accounts Payable to Purchases by 365 days: Days in A/P = (Accounts Payable / Purchases) × 365.

Compute: 700,000 / 8,000,000 = 0.0875. Then 0.0875 × 365 = 31.9375 days. Depending on rounding, this is about 31.94 days (or 31.93 if truncating to two decimals). So the result is roughly 31.9 days.