What is the relationship between current liabilities and a company’s operating cycle?

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What is the relationship between current liabilities and a company’s operating cycle?

a. Liquidation of current liabilities is reasonably expected within the company’s operating cycle (or one year if less).
b. Current liabilities are the result of operating transactions.
c. Current liabilities can’t exceed the amount incurred in one operating cycle.
d. There is no relationship between the two.

Answer: Liquidation of current liabilities is reasonably expected within the company’s operating cycle (or one year if less)

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