Asked by Katherine Tortorella on May 05, 2024
Verified
The operating cycle describes how a product:
A) Is priced.
B) Is sold.
C) Moves through the current asset accounts.
D) Moves through the production process.
E) Generates a profit.
Operating Cycle
The time period between the purchase of inventory and the collection of accounts receivable from the sale of that inventory.
Current Asset Accounts
Balance sheet accounts that represent resources with value owned by a company, expected to be converted into cash or used within a year.
- Learn how the firm's financial policies affect the components of working capital such as accounts receivable, inventory, and accounts payable.
Verified Answer
LW
Linzey WatkinsMay 12, 2024
Final Answer :
C
Explanation :
The operating cycle refers to the process of how a product moves through the current asset accounts, from being bought as inventory, sold, and then the resulting receivables being collected.
Learning Objectives
- Learn how the firm's financial policies affect the components of working capital such as accounts receivable, inventory, and accounts payable.