The ________ is the time period that elapses from the point when the firm sells a finished good on account to the point when the receivable is collected.
A) cash conversion cycle
B) average payment period
C) average age of inventory
D) average collection period

Question

Quizplus · Accepted Answer

The time period that elapses from the point when the firm sells a finished good on account to the point when the receivable is collected is known as the average collection period. Therefore, the best choice is option D. The cash conversion cycle represents the time period required to convert inventory and other resources into cash, while the average payment period is the time taken by a company to pay its creditors. The average age of inventory is the average time that a company holds its inventory before it is sold.

The ________ Is the Time Period That Elapses from the Point