The Longer the Cash Conversion Period,the Greater the Potential for Cash

question 107

True/False

The longer the cash conversion period,the greater the potential for cash flow problems to exist for a company.

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Definitions:

Business Transactions

Exchanges involving economic consideration between two entities that affect the financial position of a business.

Debits

Entries that are recorded on the left side of a ledger account which increase asset or expense accounts, or decrease liability, equity, or revenue accounts.

Credit Side

The right side of an accounting ledger where credits are recorded, often indicating a decrease in assets or an increase in liability or equity.

Debit Side

The Debit Side of an account records increases in assets or expenses and decreases in liabilities, equity, and income in double-entry bookkeeping.