The Difference Between a Firm's Operating Cycle and Its Cash

question 11

Multiple Choice

The difference between a firm's operating cycle and its cash cycle is:

• A)there is no difference between the cash and operating cycles.
• B)its account receivable days.
• C)its accounts payable days.
• D)its inventory days.

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Definitions:

Purchase Orders

A purchase order is a document issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services.

Domestic Companies

Companies that operate primarily within the borders of their home country, focusing on business activities and transactions within the same national context.

Foreign Companies

Companies that are incorporated or based in a country other than where they conduct the majority of their business activities or derive a substantial portion of their revenue.

Physical Inventory Worksheet

A document used to record actual inventory count and compare it against what is recorded in the accounting records.