Evergreen Brothers Hardware offers credit to contractors. As a reward for years of loyalty, the brothers have decided to extend the length of the credit period for their top ten customers. This
Extension will _____ the accounts receivable period, _____ the operating cycle, and _____ the
Cash cycle.

Question

Quizplus · Accepted Answer

Extending the credit period increases the accounts receivable period, which in turn increases the operating cycle. Since the cash cycle is the operating cycle minus the accounts payable period, it also increases.

Evergreen Brothers Hardware Offers Credit to Contractors