The Length of Time Between the Purchase of Inventory and the Receipt

question 91

Multiple Choice

The length of time between the purchase of inventory and the receipt of cash from the sale of that inventory 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:

Treasury Note

A Treasury note is a marketable U.S. government debt security with a fixed interest rate and maturity between one and ten years.

Bid Price

The highest price that a buyer is willing to pay for a security or commodity.

Value-Weighted Index

An index in which each component is included in proportion to its market value, making larger companies account for a bigger portion of the index.

Divisor

A mathematical component used in indices to adjust the index value, catering for changes in stock splits or similar adjustments.