A retailer's net sales equals $300,000; its accounts receivable is $30,000.Its collection period is approximately ________.
A) 10 days
B) 30 days
C) 36 days
D) 54 days

Question

Quizplus · Accepted Answer

To calculate the collection period, we use the formula: 
Accounts Receivable / (Net Sales / Number of Days in the Period)

Assuming a 365-day period, the calculation would be: 
$30,000 / ($300,000 / 365) = 36.5 (rounded to 36)

Therefore, the collection period is approximately 36 days. Choice C is the closest option.

A Retailer's Net Sales Equals $300,000; Its Accounts Receivable Is