Days' Payables Outstanding (DPO), Which Tells How Long a Firm

question 27

True/False

Days' payables outstanding (DPO), which tells how long a firm takes to pay off its suppliers for the cost of inventory, is used to measure the operating cycle.

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Definitions:

Functional Currency

The main currency used by a business or unit in its day-to-day operations.

Exchange Rate

The price at which one currency can be exchanged for another, often fluctuating based on market conditions.

Consolidated Balance Sheet

A financial statement that combines the assets, liabilities, and equity of a parent company and its subsidiaries into one document.

Acquisition Consideration

The total value transferred by a company to acquire another company, which may include cash, assets, or stock.