Which of the following is the best description of the operating cycle?
A) The length of time that it takes to convert raw materials into inventory
B) The length of time that it takes to convert raw materials into accounts receivable
C) The length of time to acquire raw materials and receive payment for them when sold
D) None of the options

Question

Quizplus · Accepted Answer

The operating cycle is the length of time it takes for a company to purchase or produce inventory, sell the products, and collect cash from the sales. This includes acquiring raw materials, converting them into finished goods, selling these goods, and receiving payment for them. Option C accurately describes this process.

Which of the Following Is the Best Description of the Operating