The operating cycle is the recurring transition of a firm's working capital from cash to inventories and inventories to receivables and back to cash.

Question

Quizplus · Accepted Answer

The operating cycle refers to the process of converting cash into inventory, inventory into accounts receivable, accounts receivable into cash, and back to cash. This cycle is a continuous process that occurs in most businesses. Therefore, statement A is true.

The Operating Cycle Is the Recurring Transition of a Firm's