Asked by Emily Treadaway on May 26, 2024
Verified
A company's operating cycle and fiscal year are usually the same length of time.
Operating Cycle
The duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from these sales.
Fiscal Year
A twelve-month period used for accounting purposes and preparing financial statements, which may or may not align with the calendar year.
- Recognize the difference between a company’s operating cycle and fiscal year.
Verified Answer
AD
Alexis DanzeyMay 29, 2024
Final Answer :
False
Explanation :
A company's operating cycle and fiscal year may or may not be the same length of time. The operating cycle refers to the time it takes for a company to turn its inventory into cash, while the fiscal year is the period of time used for financial reporting and may be determined by the company's needs or regulations.
Learning Objectives
- Recognize the difference between a company’s operating cycle and fiscal year.
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