Which of the following businesses would most likely have the longest operating cycle?
A)A chain of coffee shops.
B)A national sporting goods chain.
C)An antiques dealer.
D)A Christmas tree farm.
A firm's operating cycle can be determined by:
A)Adding the inventory turnover ratio to the receivables turnover ratio divided into 365 days.
B)Adding the average days in inventory to the average days in receivables.
C)Dividing cost-of-goods-sold by average inventory.
D)Dividing 365 days by the difference in the inventory turnover and the receivable turnover.
Which of the following is not considered a "cost" of financing credit sales?
A)The opportunity cost of lost interest.
B)Keeping the records for accounts receivable.
C)The increased sales resulting from the extension of credit.
D)The possibility of unpaid accounts.
Accounts receivable turnover is computed by dividing:
A)Sales by Accounts Receivable.
B)Accounts receivable by Sales.
C)Cost of goods sold by Inventory.
D)365 by Accounts Receivable.