Question

regarding accounting, what does the runway indicate?

the cash spent on expenses that are not offset by gross sales

the monetary value of current assets divided by current liabilities

how long a business can operate before it must generate new revenue

Explanation:

• The first option describes burn rate (cash spent on non - offset expenses).
• The second option is the current ratio (current assets/current liabilities).
• “Runway” in accounting refers to the time a business can operate with its available cash (or resources) before needing new revenue, so the third option is correct.

Answer:

C. how long a business can operate before it must generate new revenue