A firm has average accounts receivable of $85,000,and,on average,takes 50 days to collect on its sales.What is the total amount of the firm's sales?
A)$98,500
B)$620,500
C)$26.8 million
D)$78 million
E)$31 million

Question

Quizplus · Accepted Answer

The average collection period is 50 days, which is 50/365 = 0.137 years. The average accounts receivable is $85,000. So, the total amount of sales is $85,000 / 0.137 = $620,500.

A Firm Has Average Accounts Receivable of $85,000,and,on Average,takes 50