John is discussing the audit of Flower Enterprises, LLC with his boss Karen. John heard Karen mention a few days ago that a good way to understand auditing was to think of its cyclical nature. John is unsure as to how this cyclical nature would apply to the client's purchasing process, and asks Karen to explain this in some more detail. Which of the following choices represent Karen's most appropriate response to this question? O Generally speaking, everything in audit runs in cycles. The best way to understand these cycles is to calculate ratios such as inventory turnover and receivables turnover. The purchases-payables cycle is a very common cycle in the world of business. Our audit client purchases various goods and | services on credit terms, and then is required to settle the payable at a future point in time. The purchases-payable cycle is very similar to the revenue-receivables cycle. In both cycles, our audit client is required to pay for goods or services purchased on credit, with various credit terms. When we think of the client's purchases-payable cycle, we think of the client selling goods to customers on various credit terms. At some point in the