The operating cycle A) begins when the firm receives the raw materials it purcha

Question

The operating cycle

A) begins when the firm receives the raw materials it purchased that would be used to produce the goods that the firm manufactures.
B) begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales.
C) To measure operating cycle we need another measure called the days' payables outstanding.
D) ends not with the finished goods being sold to customers and the cash collected on the sales; but when you take into account the time taken by the firm to pay for its purchases.

Explanation / Answer

The operating cycle

Answer : A) begins when the firm receives the raw materials it purchased that would be used to produce the goods that the firm manufactures.

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