The ____ Is the Average Length of Time Required to Convert

question 103

Multiple Choice

The ____ is the average length of time required to convert materials into finished goods and then to sell those goods.

• A) payables deferral period
• B) receivables collection period
• C) cash conversion period
• D) inventory conversion period

---

Definitions:

Deferred Taxes

Taxes that are incurred in one period but are not paid until a future period, often due to timing differences between accounting and tax reporting.

Taxable Entity

A business or individual that is required to pay taxes to a federal, state, or local government.

Permanent Difference

These are differences between taxable income and accounting income that originate in one period and do not reverse over time, affecting taxable income and tax liability.

Temporary Difference

A discrepancy between the tax base of an asset or liability and its carrying amount on the balance sheet that results in taxable or deductible amounts in future years.