If the average collection period is 35 days, this means:
A) from the date of purchase to the date of payment is 35 days.
B) from the date of sale to the date of receipt of payment is 35 days.
C) from the date of discount to the date of receipt of payment is 35 days.
D) None of these answers are correct.

Question

Quizplus · Accepted Answer

The average collection period refers to the average number of days between the date a company makes a sale on credit and the date it receives payment for that sale. Therefore, option B is correct as it accurately describes this period from the date of sale to the date of receipt of payment.

If the Average Collection Period Is 35 Days, This Means