The Operating Cycle Is Equal to The

question 15

Multiple Choice

The operating cycle is equal to the:

• A) cash cycle plus the accounts receivable period.
• B) inventory period plus the accounts receivable period.
• C) inventory period plus the accounts payable period.
• D) accounts payable period minus the cash cycle.
• E) accounts payable period plus the accounts receivable period.

---

Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future business decisions.

Unproductive

Refers to a state or condition where output or efficiency is below the expected or required level.

Activity-based Costing

A pricing strategy that allocates expenses to goods or services according to the tasks they necessitate, striving for a more accurate distribution of costs.

Relevant Cost

A cost that should be considered when making decisions.