The Operating Cycle Is the Time It Takes for a Company

question 44

True/False

The operating cycle is the time it takes for a company to purchase goods, pay for the goods, sell them to customers, and collect the cash from the customers.

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Definitions:

Par Value

The nominal or face value of a bond, share, or coupon as stated by the issuer, often used in the context of bonds and stock.

Legal Expense

Costs incurred by a business related to legal services such as attorney fees, settlements, and court costs, often recognized as part of operating expenses.

Organization Expense

Organization expense comprises the costs related to forming a business entity, such as legal fees, registration fees, and initial administrative expenses.

Par Common Stock

The face value of a share of common stock, as stated in the corporate charter, which is the minimum amount that must be paid for a share at issuance.