A business that turns over its receivables 5.9 times a year would have an average collection period of about ________.
A)30 days
B)2/10, net 30
C)71 days
D)62 days

Question

Quizplus · Accepted Answer

To calculate the average collection period, we need to divide the number of days in a year (365) by the accounts receivable turnover:

365 / 5.9 = 61.86 (rounded to 62 days)

Therefore, the best choice is D) 62 days.

A Business That Turns Over Its Receivables 5