The operating cycle is equal to the: Multiple Choice accounts payable period plus the accounts receivable period. cash cycle plus the accounts receivable period. inventory period plus the accounts payable period. inventory period plus the accounts receivable period. accounts payable period minus the cash cycle.

inventory period plus the accounts receivable period

Explanation:

As we know that

The operating cycle = Days inventory outstanding + days sale outstanding

It is a combination of both the days inventory outstanding and the days sales outstanding

where,

Day inventory outstanding = (Beginning inventory + ending inventory) ÷ 2  ÷ cost of goods sold × number of days in a year

And,

Day sale outstanding = (Beginning Accounts receivable + ending Accounts receivable) ÷ 2 ÷ Net sales × number of days in a year

We can computed by applying the above formula

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