A Trading Partnership

question 67

Multiple Choice

A trading partnership:

• A)borrows money to avoid cash flow problems.
• B)engages in providing services.
• C)has no substantial inventory.
• D)buys but does not sell merchandise.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Operating Cycle

The average period of time it takes for a business to convert its inventory into cash through sales.

Twelve Months

A term commonly used in finance and business to refer to a full fiscal or calendar year.

Long-Term Debt

Debt obligations due for repayment in more than one year, often used for significant business investments.