IIA Exam IIA-ACCA Topic 9 Question 95 Discussion

Actual exam question for IIA's IIA-ACCA exam

Question #: 95
Topic #: 9

An organization requires an average of 58 days to convert raw materials into finished products to sell. An average of 42 additional days is required to collect receivables. If the organization takes an average of 10 days to pay for the raw materials, how long is its total cash conversion cycle?

A26 days.

B90 days.

C100 days.

D110 days.

Show Suggested Answer

Suggested Answer: B

by Staci at Jan 22, 2025, 04:26 AM

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1 months ago

Hmm, let's think this through. If it takes 58 days to convert raw materials to finished products, and an additional 42 days to collect receivables, that's 100 days total. Subtracting the 10 days to pay for raw materials, the total cash conversion cycle must be 90 days. Option B is the correct answer.

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Felix

3 days ago

So, option B is the correct answer.

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Karon

7 days ago

Yes, it makes sense when you break it down like that.

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Stanton

23 days ago

I think you're right, the total cash conversion cycle is indeed 90 days.

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