On average a company has goods on hand for 120 days before they sell them.They buy their goods on credit with 30-day terms and they sell their goods by offering 20 days to pay.How many days are there between receiving the inventory from suppliers and receiving cash from customers?

Question

Quizplus · Accepted Answer

The company holds inventory for 120 days, pays suppliers 30 days after receiving goods, and receives payment 20 days after selling, totaling 140 days (120 days of holding inventory + 20 days before receiving cash from customers).

On Average a Company Has Goods on Hand for 120