Which Statement Is True

question 57

Multiple Choice

Which statement is true?

• A)The inventory period increases as the inventory turnover rate increases.
• B)The length of the inventory period depends on the length of the cash cycle.
• C)The inventory period is the average number of days a firm holds inventory on its shelves.
• D)The inventory period is equal to the operating cycle minus the accounts payable period.
• E)The inventory period has no effect on the cash cycle.

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Definitions:

Revenue

The combined income stemming from a firm's core operations through selling products or offering services.

Social Insurance Taxes

Taxes collected from employees and employers to fund government social insurance programs, such as Social Security and Medicare.

Social Security

A government program that provides financial assistance to people who are retired, disabled, or survivors of deceased workers, funded through payroll taxes.

Medicare

A federal health insurance program in the United States for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease.