Jen Industries had sales of $32 million this year and an average accounts receivable of $0.8 million per day.On average,how long does it take to collect on its sales?
A)9 days
B)11 days
C)12 days
D)19 days
E)40 days

Question

Quizplus · Accepted Answer

To calculate the average collection period, divide the average accounts receivable by the average daily sales. First, find the average daily sales: $32 million / 365 days = $87,671.23 per day. Then, divide the average accounts receivable ($0.8 million) by the average daily sales: $0.8 million / $87,671.23 = 9.13 days, which rounds to approximately 9 days.

Jen Industries Had Sales of $32 Million This Year and an Average