The operating cycle of a company is the average time that is required to go from cash to
A) sales in producing revenues.
B) cash in producing revenues.
C) inventory in producing revenues.
D) accounts receivable in producing revenues.

Question

Quizplus · Accepted Answer

The operating cycle measures the time it takes for a company to convert cash into inventory, then into sales, and finally back into cash. Therefore, the operating cycle ends with cash in producing revenues, making option B the correct choice.

The Operating Cycle of a Company Is the Average Time