Which of the Following Statements About a Company's Operating Cycle

question 47

Multiple Choice

Which of the following statements about a company's operating cycle is not true:

• A)Non-current items are those expected to come due within one year or the company's operating cycle.
• B)The operating cycle is the time span from when cash is used to acquire goods and services until cash is received from the sale of goods and services.
• C)The length of a company's operating depends on its activities.
• D)For a merchandiser selling products, the operating cycle is the time span between paying suppliers for merchandise and receiving cash from customers.
• E)Most operating cycles are less than one year.

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Definitions:

Compounded Quarterly

A financial calculation where interest is added to the principal four times a year, resulting in an increased amount on which subsequent interest calculations are based.

Lump Sum

A one-time transaction made at a specific moment, rather than several payments spread across a period.

Withdraw

To remove funds from a bank account or investment.

Semi-Annually

Occurring or done every six months or twice a year.