Final answer:
The statement is true; a merchandising company's operating cycle begins with the acquisition of inventory and ends with the collection of cash from sales, which is crucial for managing cash flow and supporting economic growth.
Step-by-step explanation:
The statement is True. The operating cycle of a merchandising company does indeed start with the acquisition of inventory and ends with the collection of cash from customers after sales. The process encompasses purchasing inventory, selling products, and the eventual cash collection. This cycle is fundamental as it reflects the company's ability to efficiently manage its resources and maintain liquidity. Businesses depend on this cycle not only for day-to-day survival but also for growth opportunities, as profits from sales can be reinvested back into the company for expansion, upgrading technology, or increasing labor force.
Over time, this cycle contributes to the overall growth of the economy as companies employ more people and produce more goods, which further stimulates consumer spending in the market. Thus, understanding the operating cycle is crucial for managing a business's cash flow effectively.