The difference between a company’s operating cycle and its net operating cycle is:
A. the number of days that it takes, on average, for the company to sell its inventory.
B. the number of days that it takes the company to pay on the accounts due its suppliers.
C. the number of days that it takes for the company’s cash investment in inventory to result in cash collections from customers.
Answer: B. the number of days that it takes the company to pay on the accounts due its suppliers.
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