When determining the short-term operating cycle, which of the following components reduce the length of the cycle?
A)increases in the inventory period
B)increases in the accounts receivable period
C)increases in the accounts payable period
D)all of the above

Question

Quizplus · Accepted Answer

Increasing the accounts payable period will reduce the length of the short-term operating cycle because it allows the company more time to pay its suppliers, freeing up cash for other operations. Increasing the inventory period and accounts receivable period will increase the length of the cycle because it means the company is holding on to inventory and waiting for payment longer.

When Determining the Short-Term Operating Cycle, Which of the Following