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Assuming a Retailer Buys and Sells on 30 Days Credit

Question 64

Multiple Choice

Assuming a retailer buys and sells on 30 days credit and from the date of purchase it takes, on average, 14 days to sell inventory. What is the correct order for the steps in the operating cycle?
I Sell goods to customer
II Collect cash from customer
III Pay supplier
IV Buy goods for resale from supplier


A) I, II, III, IV
B) IV, III, II, I
C) IV, I, III, II
D) I, IV, II, III

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