Which One of the Following Conversion Periods Is Not a Component

question 32

Multiple Choice

Which one of the following conversion periods is not a component in the cash conversion cycle?

• A) inventory-to-sale conversion period
• B) sale-to-cash conversion period
• C) purchase-to-payment conversion period
• D) fixed assets-to-usage conversion period

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was placed in service.

Liability Accounts

Accounts on the balance sheet that represent obligations of the company, including loans, accounts payable, mortgages, and accrued expenses.

Expired Insurance

The portion of an insurance premium that has been used up during the term of the policy and is therefore no longer in effect.

Assets

Resources owned by a company, providing future economic benefits, including cash, inventory, and property.