The Number of Days, on Average, That a Business Is

question 64

Multiple Choice

The number of days, on average, that a business is extending credit to its customers is called:

• A)cash conversion cycle.
• B)average age in inventory.
• C)average collection period.
• D)cash flow cycle.

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Definitions:

Sequential Method

An approach to cost allocation in which support department costs are allocated to other support and operating departments sequentially, one after another, based on a predetermined order.

Reciprocal Services

Services exchanged between departments within an organization, used in cost accounting to allocate service department costs to producing departments.

Reciprocal Services

Services exchanged between departments within an organization or between companies without direct monetary payment, often valued and accounted for through internal mechanisms.

ABC

An abbreviation for Activity-Based Costing, a method of costing that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.