Suppose That the Inventory Period Is 50 Days, the Accounts

question 296

Multiple Choice

Suppose that the inventory period is 50 days, the accounts payable period is 35 days, and the cash cycle is 55 days. What is the operating cycle?

• A) 35 days
• B) 40 days
• C) 85 days
• D) 90 days
• E) 105 days

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Definitions:

Consolidated Financial Statements

Consolidated financial statements are a comprehensive reporting of a parent company’s financial activities, including its subsidiaries, presenting it as a single economic entity.

Goodwill

An intangible asset that arises when a buyer acquires an existing business but pays more than the fair value of its net assets at the time of acquisition.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and the potential for dividends.

Initial Value Method

An accounting approach where investments are recorded at their acquisition cost.