The Operating Cycle of a Merchandising Company Is

question 139

Multiple Choice

The operating cycle of a merchandising company is

• A)always one year in length.
• B)generally longer than that of a service company.
• C)about the same as that of a service company.
• D)generally shorter than that of a service company.

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Definitions:

Trading Securities

Short-term investments in debt or equity securities that a company intends to sell within a short period to generate profits on short-term price differences.

Comprehensive Income

Total non-owner changes in equity for a reporting period, which includes all recognized income and expenses, including those not included in the net income.

Unrealized Gain

The increase in value of an asset or investment that has not yet been sold for cash, and thus, the gain is not yet realized.

Available-for-Sale Investments

Financial assets not classified as held-to-maturity or trading securities, which can be sold in response to liquidity needs or changes in interest rates.