A Retailer Buys and Sells on 30 Days CR and from the Date

question 57

Multiple Choice

A retailer buys and sells on 30 days CR and from the date of purchase it takes, on average, 14 days to sell inventory. What is the correct order for the steps in this retailer's operating cycle?
I Sell goods to customer
II Collect cash payment from customer
III Pay supplier
IV Purchase goods for resale from supplier

• A) IV, III, II, I
• B) I, II, III, IV
• C) I, IV, II, III
• D) IV, I, III, II

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Definitions:

Interest Dates

Specific dates on which interest payments are due to be paid on a loan or bond.

Cash Paid

The total amount of cash outlay by a company during a specific period for expenses, acquisitions, or investments.

Semiannual Interest

The payment of interest on a loan or bond twice a year.

Bond Interest Expense

The cost incurred by an issuer of bonds for the interest payments made to bondholders.