Which of the Following Describes the Cash Conversion Cycle

question 84

Multiple Choice

Which of the following describes the cash conversion cycle?

• A)From the purchase of inventory to the collection of cash from the sale of that inventory.
• B)From the payment for inventory to the sale of that inventory.
• C)From the payment for inventory to the collection of cash from the sale of that inventory.
• D)From the purchase of inventory to the sale of that inventory.
• E)None of the above describes the cash conversion cycle.

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Definitions:

Job Order Costing

An accounting method used to track costs specifically associated with a particular job or order, important in manufacturing and production industries.

Movie Studio

A company that funds, produces, and distributes films, often also owning sound stages, equipment and employing staff for the creation of movies and television shows.

Materials Cost Per Unit

The total cost of materials divided by the number of units produced, indicating the material cost for each unit.

Average Cost Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.