ACCOUNTING I Dersi Merchandising Operations soru detayı:
SORU:
How does operating cycle work?
CEVAP:
Operating cycle begins with the purchase of merchandise inventory and ends when the cash from sales is collected from customers. When the company sells in cash, operating cycle becomes shorter; because in the case of credit sales company records a receivable at first and cash is collected at a later time. As the cycle shortens, companies become more profitable and liquid.