Given the following data: Sales = 3200; Cost of good sold = 1600; Average receivables =
200, calculate the average collection period:
A) 24.3
B) 22.8
C) 137
D) None of the above

Question

Quizplus · Accepted Answer

Average Collection Period (ACP) = (Accounts Receivable / Credit Sales) x Number of Days in Period
Accounts Receivable = Average Receivables
Credit Sales = Sales - Cost of Good Sold
Number of Days in Period = 365 days (assuming a year)
ACP = (200 / (3200-1600)) x 365 = 22.8 days. Therefore, the answer is B.

Given the Following Data: Sales = 3200; Cost of Good