Which one of the following will decrease the operating cycle?
A)Paying trade payables faster.
B)Discontinuing the discount given for early payment of a trade receivables.
C)Decreasing the inventory turnover rate.
D)Collecting trade receivables faster.
E)Increasing the trade payables turnover rate.

Question

Quizplus · Accepted Answer

Collecting trade receivables faster will decrease the operating cycle because it reduces the amount of time that cash is tied up in the collection of accounts receivable.

Which One of the Following Will Decrease the Operating Cycle