The Net Operating Cycle Represents the Time from Using Cash

question 54

True/False

The net operating cycle represents the time from using cash to purchase goods or services to collecting cash from the sale of goods or services.

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Definitions:

Relevant

Pertaining to something that is closely connected or appropriate to the matter at hand, especially in terms of information.

Accounting Information

This refers to the data generated from financial accounting practices, used for making business decisions.

Cost Constraint

The Cost Constraint principle in accounting refers to the idea that the value of the information provided by financial reports should outweigh the cost of providing it.

Going Concern

The assumption that an entity will continue its operations in the foreseeable future and not go bankrupt or be forced to stop operations.