The operating cycle is the time taken by a business to purchase or produce goods, sell them, and finally collect cash from customers. It shows how long working capital remains tied up in operations. Understanding the operating cycle is important for liquidity planning, inventory control, and receivables management.
Owner’s Equity
Owner’s equity is the residual interest of the owner or shareholders in the business after deducting liabilities from assets. It includes capital introduced, retained...
Overhead
Overhead refers to indirect costs that support business operations but cannot be directly traced to a specific product or service. Examples include factory rent,...
Overapplied Overhead
Overapplied overhead occurs when the amount of overhead allocated to production is greater than the actual overhead incurred during the period. This means products...
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