Which of the following is a firm's operating cycle?
A) the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product
B) the average length of time between when a firm pays cash to purchase its initial inventory and when it receives cash from the sale of the product produced from that inventory
C) the average length of time between when a firm originally purchases its inventory and when it sells the product produced from that inventory
D) the average length of time between when a firm originally purchases its inventory and when it pays cash for that inventory

Question

Quizplus · Accepted Answer

The operating cycle is the time period between the purchase of inventory and the collection of cash from receivables generated by selling the inventory.

Which of the Following Is a Firm's Operating Cycle