The time period between the day a firm pays for its inventory item and the day it received payment from the customer who purchased that inventory item is called the accounts receivable period.

Question

Quizplus · Accepted Answer

The time period described is known as the cash conversion cycle, which encompasses not just the accounts receivable period but also inventory period and accounts payable period. The accounts receivable period specifically refers to the time between the sale of the inventory and the collection of payment from the customer.

The Time Period Between the Day a Firm Pays for Its