If the planned level of sales is $146,000 and the planned average collection period is 40 days, the planned average level of accounts receivable will be:

Question

Quizplus · Accepted Answer

The planned average level of accounts receivable can be calculated as:

Planned average level of accounts receivable = (Planned level of sales ÷ 365 days) x Planned average collection period

Plugging in the values, we get:

Planned average level of accounts receivable = ($146,000 ÷ 365 days) x 40 days = $16,000

Therefore, the best choice is (C) $16,000.

If the Planned Level of Sales Is $146,000 and the Planned