ABC Co. has an average collection period of 90 days for its accounts receivable. If total credit sales for the year were $6,000,000, what is the balance in accounts receivable at year-end? Assume a 360-day calendar year.
A) $150,000
B) $2,250,000
C) $1,500,000
D) $40,000

Question

Quizplus · Accepted Answer

The average collection period is 90 days, and the total credit sales for the year are $6,000,000. Assuming a 360-day year, the accounts receivable at year-end can be calculated as ($6,000,000 / 360) * 90 = $1,500,000.

ABC Co Has an Average Collection Period of 90 Days for for Its