The Time Between the Acquisition of Assets for Processing and Their

question 14

Multiple Choice

The time between the acquisition of assets for processing and their realisation into cash or cash equivalents is known as the:

• A) acquisition cycle.
• B) payment cycle.
• C) operating cycle.
• D) realisation cycle.

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Definitions:

Depreciation Expenses

The systematic allocation of the cost of a tangible asset over its useful life.

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Accounts Payable

Liabilities of a firm that are due to be paid to creditors within a short period of time, usually within a year.

Net Income

The total revenue minus total expenses, indicating the profit made by a business over a period.