The Time Span During Which Cash Is Used to Acquire

question 106

Multiple Choice

The time span during which cash is used to acquire goods and services, and these goods and services are sold to customers, who in turn pay for their purchases with cash, is called the:

• A)accounting cycle.
• B)cash-to-cash cycle.
• C)liquidity cycle.
• D)operating cycle.

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Definitions:

JIT Inventory

Just-In-Time inventory is a management strategy that aligns raw-material orders from suppliers directly with production schedules to reduce storage costs.

Fixed Cost Margin

The portion of a company's revenue left over after covering its fixed costs, reflecting the operational efficiency and pricing strategy.

Contribution Per Unit

The amount of money left from the sale of one unit after deducting the variable costs associated with the product's production and sale.

Variable Cost Per Unit

The cost that varies with the level of output or production, such as materials and labor, on a per-unit basis.