An Operating Cycle

question 41

Multiple Choice

An operating cycle

• A) is twelve months or less in length.
• B) is the average time required for a company to collect its receivables.
• C) is used to determine current assets when the operating cycle is longer than one year.
• D) begins with inventory and ends with cash.

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Definitions:

Ratio

A measure that compares two quantities by division.

Difference

The quantitative discrepancy or deviation between two values or sets of data.

Two-tail Test

A statistical test that considers both the directions of a possible effect, testing for the possibility of positive or negative deviations from the null hypothesis.

Sample Variances

A measure of the dispersion or variability within a sample data set, which indicates how much the sample elements differ from the sample mean.