The normal operating cycle helps define which of the following balance sheet sections?
A) Intangible assets
B) Current assets
C) Property, plant, and equipment
D) Owner's equity

Question

Quizplus · Accepted Answer

The normal operating cycle relates to the time it takes for a company to turn its current assets into cash, which is typically one year or less. Therefore, the normal operating cycle most strongly relates to the current assets section of the balance sheet, which includes cash, accounts receivable, inventory, and other assets that are expected to be converted into cash within the normal operating cycle.

The Normal Operating Cycle Helps Define Which of the Following