The Ledger

question 146

Multiple Choice

The ledger:

• A)is a grouping of all of the balance sheet accounts only.
• B)is a grouping of all the income statement accounts only.
• C)contains all the accounts used by a business.
• D)contains only the permanent accounts used by a business.

---

Definitions:

Inventory Period

The average time it takes for a company to turn its inventory into sales, often used to assess the efficiency of inventory management.

Accounts Receivable Period

The average number of days it takes for a company to collect payments from its customers after a sale has been made.

Accounts Payable Period

The average number of days it takes for a business to pay off its trade creditors.

Credit

Refers to the trust allowing one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately but promises either to repay or return those resources at a later date.