The Length of the Operating Cycle Equals the Days' Sales

question 11

Multiple Choice

The length of the operating cycle equals the days' sales uncollected plus the

• A)days' payable.
• B)days' inventory on hand.
• C)receivable turnover.
• D)payables turnover.

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Definitions:

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its shareholders as dividends.

Organizational Expenses

Costs incurred during the formation of a company, such as legal fees, registration fees, and promotional expenses.

Intangible Assets

Non-physical assets possessed by a company, such as patents, trademarks, and goodwill, that have value and can produce future economic benefits.

Balance Sheet

A report that outlines the total assets, obligations, and equity of shareholders of a company at a given time.