Value Electronics Company started its operations on January 1,2019.Value engages in buying and selling different types of electronic gadgets.The first step in its operating cycle would be to ________.
A) collect cash from customers
B) sell goods to customers
C) purchase inventory from vendors
D) record the sales in accounts

Question

Quizplus · Accepted Answer

The first step in the operating cycle of a merchandising business like Value Electronics is to purchase inventory from vendors in order to be able to sell goods to customers. It is only after the inventory has been acquired that the firm can engage in sales transactions and collect cash from customers. Recording the sales in accounts comes later in the operating cycle.

Value Electronics Company Started Its Operations on January 1,2019