Which one of these affects the length of the cash cycle but not the operating cycle?
A) Inventory period
B) Accounts payable period
C) Both the accounts receivable and inventory periods
D) Accounts receivable period
E) Both the accounts receivable and the accounts payable periods

Question

Quizplus · Accepted Answer

The cash cycle is affected by the accounts payable period because it represents the time between when a company buys the raw materials it needs to produce its goods and when it pays for these materials. Unlike the operating cycle, which includes the inventory period and accounts receivable period, the cash cycle is shortened by the accounts payable period, as it delays the outflow of cash.

Which One of These Affects the Length of the Cash