Which one of the following will not affect the operating cycle?
A) decreasing the payables turnover from 7 times to 6 times
B) increasing the days sales in receivables
C) decreasing the inventory turnover rate
D) increasing the average receivables balance
E) decreasing the credit repayment times for the firm's customers

Question

Quizplus · Accepted Answer

The operating cycle is the time it takes for a company to convert its inventory and receivables into cash. Decreasing the payables turnover from 7 times to 6 times will not affect the operating cycle because it does not involve inventory or receivables. The other options involve changes to inventory, receivables, or credit repayment times, which will affect the operating cycle in some way.

Which One of the Following Will Not Affect the Operating