Net credit sales are $4,000,000 and average gross receivables are $250,000. The collection period is:
A) 16 times.
B) 6.25 percent.
C) 16 days.
D) 22.8 days.

Name: Net credit sales are $4,000,000 and average gross receivables are $250,000. The collection period is: A) 16 times. B) 6.25 percent. C) 16 days. D) 22.8 days.
Brand: Quizplus
Rating: 4.8 (35 reviews)

Question

Quizplus · Accepted Answer

The collection period is calculated as (Average Gross Receivables / Net Credit Sales) * 365. So, ($250,000 / $4,000,000) * 365 = 22.8 days.

Net Credit Sales Are $4,000,000 and Average Gross Receivables Are