Question

Match the transaction cycles with correct description. In this cycle transactions include acquiring materials, property and labor in exchange for cash. In this cycle the company is focused on producing their products and accounting for the cost of production. This cycle includes sales order processing and receiving cash from customers. A. Revenue cycle B. Financial cycle C. Expenditure cycle D. Conversion Cycle

Answer 1

Answer:

A. Revenue cycle: This cycle includes sales order processing and receiving cash from customers.

C. Expenditure cycle: In this cycle transactions include acquiring materials, property and labor in exchange for cash.

D. Conversion Cycle: In this cycle the company is focused on producing their products and accounting for the cost of production.

Explanation:

These are the tree transaction cycles that exist in all businesses. Understanding them can allow us to understand how a business operates and what we need to pay attention to when starting a business. The revenue cycle consists of processing sales orders and receiving cash from customers. The expenditure cycle consists of purchasing materials, property and labor necessary for the business. Finally, the conversion cycle consists of the company focusing on producing their products and accounting for the cost of production.