The time span during which cash is paid for goods and services,which are then sold to customers from whom the business collects cash,is called the ________.
A) production time
B) operating cycle
C) accounting cycle
D) sales time

Question

Quizplus · Accepted Answer

The operating cycle represents the time period in which the company purchases inventory, sells the inventory to customers, and collects cash from those customers. It includes both the production cycle (time it takes to acquire or produce goods) and the sales cycle (time it takes to sell goods). The accounting cycle refers to the regular process of recording and reporting financial transactions. Production time and sales time alone do not encompass the entire process of converting goods into cash.

The Time Span During Which Cash Is Paid for Goods