Question

Essay Describe three transaction cycles of the firm's economic activity. (See page 43)

Answer 1

Above question is about three transaction cycles of the firm's economic activity. Refer below image for more detailed information.

Answer. • hvity Three transaction cycles: The expenditure cycle, conversion cycle and revenue cycle. Following are three cycles of transaction processing system: The Expenditure cycle: The first cycle in transactional processing system is expenditure Cycle. In this part of cycle a boliness needs to invest money in buying assets. Every business begins its operations by acquisition of property, materal and bbor. The conversion cycle : Conversion cycle consist of two major subrystems. The first subsystem is production System and the other is cart accounting system. The production system includes manufacturing of product cost accounting System includes the inflow y out flow of cash at the time of production. The Revenue cycle : Firm sell their product to customer in revenue cycle. In this cycle firm generates revenue from there customers. They sell their product to costomer at a price higher as compared to manufacturing cost. The Revenue cycle includes financial and physical components. These components dealt separately. a