Weson has sales of £462,000, costs of goods sold of £308,000 and average trade receivables of £48,900.How long does it take its credit customers to pay for their purchases?

Question

Quizplus · Accepted Answer

Average collection period = (trade receivables / credit sales) x 365

Credit sales = Sales - COGS
Credit sales = £462,000 - £308,000 = £154,000

Average collection period = (48,900 / 154,000) x 365 = 38.63 days.

Therefore, the answer is B) 38.63 days.

Weson Has Sales of £462,000, Costs of Goods Sold of £308,000