Kantorovich Company normally takes 30 days to pay for its average daily credit purchases of $2,000. Its average daily sales are $3,000, and it collects accounts in 25 days. What is its net credit position?
A)$15,000
B)$1,000
C)($1,000)
D)($15,000)

Question

Quizplus · Accepted Answer

Net credit position = (Average daily credit purchases x Credit period) - (Average daily sales x Collection period)= ($2,000 x 30 days) - ($3,000 x 25 days)= $60,000 - $75,000= -$15,000

Kantorovich Company Normally Takes 30 Days to Pay for Its