Madeleine Would Like to Know How Long It Takes,on Average,from

question 79

Multiple Choice

Madeleine would like to know how long it takes,on average,from the time inventory is received until it is sold.Madeleine is interested in the:

• A)days in credit.
• B)days in inventory.
• C)days in payables.
• D)days sales outstanding.

---

Definitions:

Revenue Recognition

The accounting principle that dictates the conditions under which revenue is recognized and recorded, often requiring that revenue is earned and measurable.

Implicit Rate

An interest rate that is indirectly indicated but not explicitly defined, often used in lease agreements to represent the lessor’s return.

Fair Value

The financial return from unloading an asset or the expense of reallocating a liability in a formalized negotiation among market counterparts at the point of evaluation.

Economic Life

Refers to the expected period of time during which an asset is useful to the average owner.