The Order Cycle Is the Time Between Receipts of Orders

question 33

True/False

The order cycle is the time between receipts of orders in an inventory cycle.

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Definitions:

Acid-Test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Marketable Securities

Financial instruments that can be easily converted into cash. They include stocks, bonds, and Treasury bills among others.

Current Liabilities

Financial responsibilities that must be settled within a period of one year.

Noncurrent Assets

Long-term assets that are not expected to be converted into cash within a year, such as property, plant, and equipment.