The Length of Time Between the Acquisition of Inventory and the Collection

question 370

Multiple Choice

The length of time between the acquisition of inventory and the collection of cash from receivables is called the _______________________.

• A) Operating cycle.
• B) Inventory period.
• C) Accounts receivable period.
• D) Accounts payable period.
• E) Cash cycle.

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Definitions:

Stock Dividend

A form of dividend payment made in additional shares of the issuing corporation, rather than in cash.

Reverse Stock Split

A corporate action that consolidates the number of existing shares of stock into fewer, proportionally more valuable shares.

Shares

Units of ownership interest in a corporation or financial asset, providing a proportionate claim on its assets and profits.

Stock Split

An action by a corporation where it splits its current shares into numerous shares, aiming to increase the shares' liquidity.