Question

Place the operating cycle for a merchandiser in the correct order. Definition: 1. Credit sales 2. Receipt of cash from credit sales Cash purchase of merchandise 4. Accounts receivable 5. Inventory for sale. Term?

Answer 1

The operating cycle for a merchandiser involves purchasing inventory, making sales on credit, recording accounts receivable, and receiving cash from credit sales. Checks and credit card payments are methods through which payments for goods and services are processed, and an overdraft happens when expenses exceed the account balance.

Step-by-step explanation:

The operating cycle for a merchandiser is the sequence of steps from purchasing inventory to collecting cash from customers. The correct order is:

Purchase of inventory on cash or credit (Inventory for sale)

Sale of merchandise on credit (Credit sales)

Recording the receivable (Accounts receivable)

Receipt of cash from credit sales (Receipt of cash)

Using a check for payment involves transferring money from the payer's account to the seller's account. When a store receives a check, it deposits the check to collect the money. An overdraft occurs when you write a check or make a payment for more than the amount of money available in your checking account.

In contrast, a credit card transaction immediately transfers money from the credit card company's account to the seller, with the user owing the amount at the end of the month, essentially acting as a short-term loan.