The Time Span During Which Cash Is Paid for Goods

question 5

Multiple Choice

The time span during which cash is paid for goods and services,which are then sold to customers from whom the business collects cash,is called the ________.

• A) production time
• B) operating cycle
• C) accounting cycle
• D) sales time

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Definitions:

Foreign Currency Firm Commitments

Agreements to execute a financial transaction in a foreign currency at a future date, at a predetermined rate or price.

Cash Flow Hedge

A form of hedge accounting that aims to reduce the exposure to variability in cash flows related to a specific risk.

Foreign Currency Option

A financial derivative that gives the holder the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.

Fair Value

The cost at which one could sell an asset or assume a liability in a structured exchange with market participants on the valuation date.