The carrying value of its account receivable is £700,000 and the average collection period is 45 days.The ﬁrm's credit sales per day are:

Question

Quizplus · Accepted Answer

To find out the credit sales per day, we need to calculate the average daily sales. 
Average collection period = 45 days 
So, the average daily sales = (Accounts receivable) / (Average collection period) 
= £700,000 / 45 
= £15,555.56 (rounded to nearest penny) 
Therefore, the credit sales per day are £15,555.56 (Option A).

The Carrying Value of Its Account Receivable Is £700,000 and the Average