The Length of Time Between the Payment for Inventory and the Collection

question 315

Multiple Choice

The length of time between the payment for 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:

Prorated Refund

A return of a portion of a payment, calculated based on the proportion of a service or good that was not used or was unusable.

Weekly Issues

Publications or problems that arise on a weekly basis, often used in the context of magazines or continuous challenges.

Magazine Subscription

A purchase agreement in which a customer pays in advance to receive periodic issues of a magazine.

Exchange Rate

The exchange value of one currency against another.