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Indicate Whether Each of the Following Statements Is True or False

Question 42

Matching

Indicate whether each of the following statements is true or false.

Premises:

Responses:

The length of an operating cycle is computed by adding the sum of the average days in inventory and the average number of days to collect accounts receivable.

True

The operating cycle is longer for a winery than a fast-food restaurant.

False

Other things being equal,an operating cycle of 49 days is more desirable than an operating cycle of 120 days.

The length of an operating cycle is not relevant to the profitability of a business.

The length of an operating cycle equals the average days to collect accounts receivable.

Premises:

The length of an operating cycle is computed by adding the sum of the average days in inventory and the average number of days to collect accounts receivable.

The operating cycle is longer for a winery than a fast-food restaurant.

Other things being equal,an operating cycle of 49 days is more desirable than an operating cycle of 120 days.

The length of an operating cycle is not relevant to the profitability of a business.

The length of an operating cycle equals the average days to collect accounts receivable.

Responses:

True

False

Correct Answer:

Premises:

Responses:

The length of an operating cycle is computed by adding the sum of the average days in inventory and the average number of days to collect accounts receivable.

The operating cycle is longer for a winery than a fast-food restaurant.

Other things being equal,an operating cycle of 49 days is more desirable than an operating cycle of 120 days.

The length of an operating cycle is not relevant to the profitability of a business.

The length of an operating cycle equals the average days to collect accounts receivable.

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