The time between when the firm pays its suppliers and when it collects money from its customers is known as the:
A) operating cycle
B) cash conversion cycle
C) accounts receivable period
D) clearing cycle

Question

Quizplus · Accepted Answer

The time period between paying suppliers for inventory and collecting money from customers for the sale of that inventory is known as the cash conversion cycle. It is also sometimes known as the working capital cycle. This period is important for firms to manage effectively in order to ensure their ongoing solvency and financial health.

The Time Between When the Firm Pays Its Suppliers and When