What are the steps of the operating cycle for a merchandiser with credit sales?

Operating Cycle

The duration of time it takes for a company to buy inventory, sell it as finished goods, and collect cash from the sales.

Credit Sales

Sales made by a business where payment is delayed, allowing the customer to pay at a later date.

Understand the critical role of inventory management activities in merchandising enterprises.

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Final Answer :

The steps are: (1)cash purchases of merchandise; (2)inventory for sale; (3)credit sales (4)accounts receivable; (5)cash collection.

Learning Objectives

Understand the critical role of inventory management activities in merchandising enterprises.