A company which offers "n/15" credit terms assuming 360 days in year would be expected to have a receivable turnover of about 24 times a year.

Question

Quizplus · Accepted Answer

With "n/15" credit terms, the company expects payment within 15 days, which would lead to a receivable turnover of about 360/15 = 24 times a year. However, the correct calculation for turnover is 360 divided by the credit terms in days. The mistake in the statement is assuming "n/15" directly translates to a 15-day payment expectation without further context, but the correct interpretation should be based on actual payment terms provided, which in this case, seems to be misinterpreted. The correct turnover calculation depends on the actual payment terms, not just the formula provided.

A Company Which Offers "N/15" Credit Terms Assuming 360 Days