orres Corp. estimates its sales returns at the end of each month. On December 1, 2022, Torres Corp.’s “Sales Return Liability” account had a normal balance of $10,000. During December, the company had customer sales totaling $600,000 and actual returns of $12,000.   At the end of December, Torres estimates sales returns related to December’s sales will be $8,000.    Question: What should be the “Sales Return Liability” account balance on 12/31/22 after all entries have been made?

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Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.