The operating cycle: A. begins when a firm receives the raw materials that would

Question

The operating cycle:

A. begins when a firm receives the raw materials that would be used to produce the goods that the firm manufactures.

B. begins when a firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales.

C.does not end 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.

D.cannot be measured without knowing the days' payables outstanding.

Explanation / Answer

B. begins when a firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales

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