CFA Practice Question

There are 120 practice questions for this study session.

CFA Practice Question

On May 15, your firm receives 20 cases of designer pens. On June 30, your firm pays $3,250 for the pens. On July 15, the pens are sold on credit for $10,500. On September 10, your firm collects the receivable in full. If each transaction occurs at the end of the business day, how many days are in the inventory period?
A. 46 days
B. 61 days
C. 72 days
Explanation: Days in the accounts payable period: 46.
Days in the accounts receivable period: 57.
Days in the cash cycle: 72.

User Contributed Comments 3

User Comment
pdubyac Cash cycle--from disbursement to cash receipt
AP period--from inventory receipt to cash payment
AR period--from sale to cash receipt
Inventory period--from inventory receipt to sale
serboc you can just count the number of day from 5/15-7/15
kellyyang good ideas!
You need to log in first to add your comment.