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Exam CSCP topic 1 question 781 discussion

Actual exam question from APICS's CSCP
Question #: 781
Topic #: 1
[All CSCP Questions]

Which of the following descriptions represents cash-to-cash conversion?

  • A. The conversion time from material acquisition to sales revenue
  • B. The conversion time from sales order to receipt of payment
  • C. The currency conversion rate when buying and selling goods
  • D. The measure of an organization’s effective use of inventory
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Suggested Answer: A 🗳️

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ab059f7
3 months, 3 weeks ago
Selected Answer: B
the correct is B
upvoted 1 times
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duckula88
6 months ago
Selected Answer: B
Option A describes the time it takes for materials to be acquired and converted into sales revenue, which is commonly referred to as the "cash-to-cash cycle" or "cash conversion cycle". This cycle includes the time it takes to acquire materials, manufacture products, sell them, and collect payment from customers. However, the term "cash-to-cash conversion" specifically refers to the time it takes for a company to convert its investments in inventory back into cash through sales and subsequent receipt of payment. Therefore, option A is more accurately described as the "cash-to-cash cycle" rather than "cash-to-cash conversion".
upvoted 1 times
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Rajiv8047
11 months, 2 weeks ago
Selected Answer: A
Cash-to-cash conversion cycle refers to the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
upvoted 1 times
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A (35%)
C (25%)
B (20%)
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