The following statements are true regarding the operating cycle of a merchandising company except:
A) The operating cycle is shortened by credit sales.
B) The operating cycle ends with the collection of cash from the sale of merchandise.
C) The operating cycle begins with the purchase of merchandise.
D) The operating cycle can vary in length among different merchandising companies.
E) The operating cycle sometimes involves accounts receivable.

Question

Quizplus · Accepted Answer

Credit sales actually lengthen the operating cycle by adding the time it takes to collect the accounts receivable.

The Following Statements Are True Regarding the Operating Cycle of a Merchandising