The Cash Cycle Is Defined as the Time Between

question 73

Multiple Choice

The cash cycle is defined as the time between:

• A)the arrival of inventory and cash collected from receivables.
• B)selling a product and paying the supplier of that product.
• C)selling a product and collecting the accounts receivable.
• D)cash disbursements and cash collection for an item.
• E)the sale of inventory and cash collection.

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Definitions:

Interest Revenue

Income earned by a company for lending money or through investments in interest-bearing assets.

Lease Rental Revenue

Income earned by a lessor from leasing out assets to lessees, under the terms specified in lease agreements.

Lease Receivable

An asset account on the balance sheet that represents the amount of rent due to the lessor from the lessee according to the lease agreement.

Sales-Type Lease

An arrangement where a lessor sells an asset to a lessee under lease terms, effectively treating the lease as a purchase and sale from an accounting standpoint.