Assuming an Entity Sells Inventory Only on Credit Terms,use the Following

question 52

Multiple Choice

Assuming an entity sells inventory only on credit terms,use the following information to calculate the length of the entity's activity cycle and cash cycle.
Days inventory is 60 days.
Days debtors is 35 days.
Days creditors is 30 days.

• A) Activity cycle is 95 days; cash cycle is 65 days.
• B) Activity cycle is 65 days; cash cycle is 95 days.
• C) Activity cycle is 65 days; cash cycle is 30 days.
• D) Activity cycle is 95 days; cash cycle is 30 days.

---

Definitions:

Epinephrine

A hormone and neurotransmitter also known as adrenaline, involved in the body's fight-or-flight response.

Aldosterone

A steroid hormone produced by the adrenal gland that regulates salt and water balance in the body.

Adrenal Gland

A pair of endocrine glands located above the kidneys that produce a variety of hormones including adrenaline and cortisol, which help control stress response, blood pressure, and metabolism.

PTH

Parathyroid hormone, a key regulator of calcium levels in the blood and bone metabolism.