The operating cycle includes the number of days it takes to:
A)Purchase goods,sell goods,pay cash to suppliers.
B)Purchase goods,pay cash,collect cash from customers.
C)Borrow money,collect cash from customers,repay cash borrowed.
D)Pay cash for goods,sell goods,collect cash from customers.

Question

Quizplus · Accepted Answer

The operating cycle refers to the time it takes for a business to purchase goods or inventory, sell those goods, and then collect payment from customers. Therefore, the correct choice would be D which involves paying cash for goods, selling goods, and then collecting cash from customers.

The Operating Cycle Includes the Number of Days It Takes