Trend Foods Distributes Its Products to More Than 100 Restaurants

question 12

Multiple Choice

Trend Foods distributes its products to more than 100 restaurants and delis. The company's collection period is 32 days, and it keeps its inventory for 10 days. What is Trend's operating cycle?

• A) 22 days
• B) 32 days
• C) 42 days
• D) None of the above

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividends and without voting rights.

Bonds Payable

Bonds payable are long-term liabilities representing money a company must pay back to bondholders, typically at specified interest rates and dates.

Consolidated Financial Statements

Financial reports that combine the accounting and financial information of a parent company and its subsidiaries into one set of statements.

Retained Earnings

The portion of a company's profits not distributed to shareholders as dividends but retained for reinvestment in the business or to pay off debt.