The ________ is the time period that elapses from the point when the firm makes the outlay to purchase raw materials on account to the point when payment is made to the supplier of the goods.
A)cash conversion cycle
B)average payment period
C)average age of inventory
D)average collection period
E)none of the above

Question

Quizplus · Accepted Answer

The time period described in the question is known as the average payment period, which represents the average number of days it takes for a company to pay its suppliers for goods purchased on account. The cash conversion cycle is a broader measure of a company's efficiency in managing its cash flow, taking into account the time it takes to sell inventory and collect receivables in addition to the average payment period. The average age of inventory and average collection period are measures of inventory management and accounts receivable management, respectively.

The ________ Is the Time Period That Elapses from the Point