The operating cycle of a business is best deﬁned as which of the following?
A) the period of time for which we prepare our ﬁnancial statements
B) the length of time over which our plant and equipment assets are expected to be used by the company in generating revenues
C) the time it takes for a company to purchase and pay for goods or services from suppliers, sell those goods or services to customers and collect cash from the customers
D) one year

Question

Quizplus · Accepted Answer

The operating cycle of a business refers to the time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales. This cycle is crucial for understanding how efficiently a company turns its inventory into cash.

The Operating Cycle of a Business Is Best Deﬁned as Which