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Teo noted that purchases in both years were the same. Which of the following statements is a valid explanation for the A/P days outstanding? options:

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Teo noted that purchases in both years were the same. Which of the following statements is a valid explanation for the A/P days outstanding?

options:

a)

LCC likely received less early payment discounts in 2020 than in 2019.

b)

LCC is taking more time to pay its suppliers in 2020, compared to 2019.

c)

LCC is better using interest-free credit in 2020.

d)

LCC has better liquidity than industry.
Teo is the controller for Liberty Clothing Company (LCC) and is reviewing ratios calculated by Sharon, the financial analyst. As a public company, LCC reports under IFRS. Sharon calculated the accounts payable (A/P) days outstanding and prepared the following graph: A/P days outstanding 35 30 30 30 25 24 20 DAYS 20 15 10 5 0 2019 20 A/P days outstanding graph YEAR LCC Industry average

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