An auditor is always particularly concerned with a metric that measures how long it takes the client firm to purchase inventory, sell the inventory, and collect the associated receivable.This metric is commonly referred to as _________.
A)the gross operating cycle
B)the financing cycle
C)the investing cycle
D)the inventory cycle

Question

Quizplus · Accepted Answer

The metric being described is the gross operating cycle, which measures the time it takes for a firm to complete its operating cycle from the purchase of inventory to the collection of receivables. The financing cycle relates to the firm's funding sources, the investing cycle relates to the firm's capital expenditures and investments, and the inventory cycle refers specifically to the time it takes a firm to turn over its inventory.

An Auditor Is Always Particularly Concerned with a Metric That