Which of the following measures the average time from purchase of materials and labor to actual cash payment?
A)sale-to-cash conversion period
B)inventory-to-sale conversion period
C)purchase-to-payment conversion period
D)cash conversion cycle

Question

Quizplus · Accepted Answer

The purchase-to-payment conversion period measures the length of time it takes a company to convert its purchases of materials and labor into actual cash payments. A longer conversion period indicates that a company is taking longer to pay its suppliers, which can negatively impact relationships and potentially result in a reduction in credit terms.

Which of the Following Measures the Average Time from Purchase