The Conversion of Current Assets from Inventory to Receivables to Cash

question 30

Multiple Choice

The conversion of current assets from inventory to receivables to cash provides the of cash used to pay the current liabilities, which represents a(n) of cash.

• A) outflow; inflow
• B) inflow; source
• C) use; source
• D) source; use

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Definitions:

Expected-Rate-Of-Return

The anticipated percentage of profit or loss an investment is likely to generate.

Immediate Costs

Expenses that are directly incurred and need to be paid out in the short term.

Uncertain Benefits

Refers to potential advantages or gains from an investment or action that cannot be precisely predicted or quantified.

Production Cost

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overhead.