If a Computer Dealer Has 20 Computers at the Beginning

question 141

Multiple Choice

If a computer dealer has 20 computers at the beginning of the month,receives an additional 35 computers during the month,and sells no computers during the month,the dealer's inventory investment for that month would be

• A)minus 35 computers.
• B)plus 20 computers.
• C)minus 20 computers.
• D)plus 35 computers.
• E)plus 55 computers.

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Definitions:

Operating Cycle

The operating cycle is the time period it takes for a company to purchase inventory, sell it, and convert the sale into cash.

Cash Cycles

The amount of time it takes for a business to convert its investments in inventory and other resources into cash flows from sales.

Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by comparing total purchases to average accounts payable.

Inventory Sold

The total cost of goods or merchandise a business has sold to customers during a specific period, key for calculating cost of goods sold.