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

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Definitions:

Section 179 Expense

A section of the IRS tax code allowing businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year.

Separately Stated

Items on a tax return or financial statement that are listed individually to ensure proper treatment under tax laws or accounting rules.

Ordinary Income

Income earned from providing services or the sale of goods, as opposed to capital gains or investment income, taxed at standard rates.

Section 179 Expense

A tax deduction that allows businesses to deduct the full purchase price of qualifying equipment and/or software within a tax year.