Question : Where operating cycle cannot be identified, it is assumed to be of -------- months.
Option 1: 15 months
Option 2: 18 months
Option 3: 12 months
Option 4: None of the above
Correct Answer: 12 months
Solution : Answer = 12 months
When the operating cycle cannot be clearly determined, it is typically assumed to be 12 months. This assumption aligns with the general understanding of business operations and financial reporting practices. However, in cases where the operating cycle is significantly longer or shorter, adjustments may be necessary for accurate analysis and decision-making. Hence, the correct option is 3.
Question : Which of the following statements is not true, with respect to operating cycles?
Question : When the Period of Operating Cycle is more than 12 Months (Say 15 Months): Liabilities due for settlement (payment) within 15 months from the date of the Balance Sheet are classified (shown) as --------------
Question : When Period of Operating Cycle is less than 12 Months: Liabilities due for settlement (payment) within 12 months from the date of Balance Sheet are classified (shown) as ------------------
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