Which statement is not true?
A)Not all obligations that become due and will be paid within the next accounting period are classified as current liabilities.
B)The components of working capital are disclosed on the balance sheet.
C)An increasing current ratio could result from decreasing liquidity.
D)An operating cycle is the average time taken by a company to convert receivables back into cash.

Question

Quizplus · Accepted Answer

An operating cycle is the average time it takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales. It is not solely focused on converting receivables back into cash but encompasses the entire process from purchasing inventory to collecting cash from sales.

Which Statement Is Not True