What was the average collection period for 2015?
A) 92 days
B) 112 days
C) 151 days
D) 211 days
E) 256 days

Question

What was the average collection period for 2015?
A) 92 days 
B) 112 days 
C) 151 days 
D) 211 days 
E) 256 days

Quizplus · Accepted Answer

To calculate the average collection period, we use the formula: 
Average Collection Period = (Accounts Receivable / Credit Sales) x Number of Days in the Period

For 2015: 
Accounts Receivable = $171,000 
Credit Sales = $5,340,000 
Number of Days in the Period = 365

So, Average Collection Period = (171,000 / 5,340,000) x 365 = 11.72

Rounding to the nearest whole number, the average collection period for 2015 is 112 days, which is option B.

What Was the Average Collection Period for 2015