The normal operating cycle helps define which of the following balance sheet sections?
A)Owner's equity
B)Current liabilities
C)Intangible assets
D)Property,plant,and equipment

Question

Quizplus · Accepted Answer

The normal operating cycle refers to the time it takes for a company to convert its resources into cash or a cash equivalent. This includes selling inventory, collecting receivables, and paying off payables. As such, it is most closely tied to the current liabilities section of the balance sheet, as these are typically obligations that must be paid off within the normal operating cycle.

The Normal Operating Cycle Helps Define Which of the Following