The cash cycle can be defined as the operating cycle:
A) Minus the accounts receivable period.
B) Plus the accounts receivable period.
C) Minus the accounts payable period.
D) Plus the accounts payable period.
E) Plus the inventory period.

Question

Quizplus · Accepted Answer

The cash cycle is defined as the operating cycle minus the accounts payable period. This calculation reflects the time period between when a company pays its suppliers for inventory and when it receives cash from its customers, effectively measuring the time it takes for a company to turn its inventory purchases into cash.

The Cash Cycle Can Be Defined as the Operating Cycle