Acme,Inchas Been Profitable Since Its First Day of Operations,until the Recent

question 65

Multiple Choice

Acme,Inc.has been profitable since its first day of operations,until the recent economic downturn.This year,for the first time in fifty years,Acme has expenses that are greater than its revenues.This loss should be reported on Acme's income statement as ________.

• A)an operating loss
• B)an extraordinary loss
• C)a loss from discontinued operations
• D)a non-recurring loss

---

Definitions:

Operating Cycle

The amount of time it takes for a company to purchase inventory, sell it, and convert the sale back into cash.

Average Payment Period

The average time it takes a company to pay off its accounts payable.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.

Average Sales Period

The average amount of time it takes for a company to sell its inventory, which can reflect its inventory management efficiency.