The Operating Cycle of a Business Is Best Defined as Which

question 81

Multiple Choice

The operating cycle of a business is best defined as which of the following?

• A) the period of time for which we prepare our financial statements
• B) the length of time over which our plant and equipment assets are expected to be used by the company in generating revenues
• C) the time it takes for a company to purchase and pay for goods or services from suppliers, sell those goods or services to customers and collect cash from the customers
• D) one year

Recognize the significance and approach of Lean Process Improvement.

Identify the objectives and techniques of Six Sigma.

Comprehend the concept and application of the Zero-Defects Approach.

Grasp the importance of employee involvement teams in improving business processes.

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Definitions:

Confirmatory Value

The aspect of financial information that helps users confirm or correct prior expectations.

Fair Value

The price at which an asset would be bought or sold in an orderly transaction between market participants at the measurement date.

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase price, not their current market value.

Economic Entity Assumption

The economic entity assumption is an accounting principle that treats a company as a separate entity from its owners for reporting purposes.