If a company's operating cycle is 90 days long, the company would use a period of one year to identify current assets and current liabilities.

Question

Quizplus · Accepted Answer

The operating cycle determines the time frame within which a company's current assets are typically converted to cash. If the operating cycle is 90 days, the company would use a 12-month period to identify its current assets and liabilities. This is because the company may go through the operating cycle several times within a year, and it is important to capture all current assets and liabilities that are part of this cycle.

If a Company's Operating Cycle Is 90 Days Long, the Company