A Firm Has an Inventory Turnover Rate of 16,a Receivables

question 88

Multiple Choice

A firm has an inventory turnover rate of 16,a receivables turnover rate of 21 and a payables turnover rate of 11. How long is the operating cycle?

• A) 37.00 days
• B) 40.19 days
• C) 42.87 days
• D) 63.08 days
• E) 73.37 days

---

Definitions:

Credit Memorandum

A document issued by a supplier to a buyer, reducing the amount the buyer owes to the supplier, often due to a return or refund.

Internal Control Problems

Issues or weaknesses in a business's processes that can lead to inaccurate financial reporting, fraud, or operational inefficiency.

Segregation Of Duties

A fundamental control principle that ensures critical tasks are divided among different individuals to prevent fraud and errors.

Physical Controls

Security measures implemented to safeguard tangible assets, such as locks, surveillance cameras, and secure storage facilities.