An Operating Cycle

question 20

Multiple Choice

An operating cycle

• A) is twelve months or less in length.
• B) is the average time required for a company to collect its receivables.
• C) is used to determine current assets when the operating cycle is longer than one year.
• D) starts with inventory and ends with cash.

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Definitions:

Degrees of Freedom

The number of independent values or quantities which can vary in the calculation of a statistic, typically in the context of hypothesis testing.

F Distribution

A continuous probability distribution that arises frequently as the null distribution of a test statistic, especially in the analysis of variance (ANOVA).

Numerator

The top number in a fraction, representing the part of the whole or the dividend in division.

Chi-square Distribution

A statistical distribution that describes the distribution of the sum of the squares of a set of variables, often used in hypothesis testing.