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Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for
Indicate the impact of the following on the cash and operating cycles, respectively. Use the letter I to indicate an increase, the letter D for a decrease, and the letter for no change:
a The terms of cash discounts offered to customers are made less favourable.
b The cash discounts offered by suppliers are decreased; thus, payments are made earlier.
c An increased number of customers begin to pay in cash instead of with credit.
d Fewer raw materials than usual are purchased.
e A greater percentage of raw material purchases are paid for with credit.
f More finished goods are produced for inventory instead of for order.
tableshOperating Cycle Click to selectClick to select
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