Which of the following is the best definition of inventory period?
A) The time between cash disbursement and cash collection.
B) Graphical representation of the operating cycle and the cash cycle.
C) A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.
D) A secured short-term loan to purchase inventory.
E) The time it takes to acquire and sell inventory.

Question

Quizplus · Accepted Answer

The inventory period refers to the duration it takes for a company to acquire, sell, and replace inventory. This is a crucial component of managing working capital and understanding the operating cycle of a business.

Which of the Following Is the Best Definition of Inventory