Calculation of a Firm's Average Collection Period Is the Same

question 145

Multiple Choice

Calculation of a firm's average collection period is the same as calculating the:

• A)accounts receivable cycle
• B)inventory cycle
• C)accounts payable cycle
• D)short-term operating cycle

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Definitions:

Straight-Line Depreciation

A procedure for allocating the price of a physical asset over its effective life in identical annual installments.

Useful Life

The estimated time period that an asset is expected to be usable for its intended purpose, affecting its depreciation calculation.

Patent Rights

This is the legal protection granted to an inventor or assignee offering exclusive rights to use and profit from an invention for a certain period.

Amortization

The process of gradually writing off the initial cost of an intangible asset over a period of time.