AVERAGE PAYMENT PERIOD Definition

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AVERAGE PAYMENT PERIOD (APP) is the number of days an entity takes to pay off credit purchases. As the average payment period increases, cash should increase as well, but working capital will remain the same. Formula: accounts payable / (total annual purchases / 360).

Learn new Accounting Terms

CASH RECEIPTS JOURNAL is the journal for recording all cash receipts.

MANUAL TAG SYSTEM is an inventory tracking system used in inventory management that tracks inventory using tags removed at the point of purchase.

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