If the collection period of a company is 31 days, and the average receivables is $70,060, what is the total amount of the credit sales?

Name: If the collection period of a company is 31 days, and the average receivables is $70,060, what is the total amount of the credit sales?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The collection period formula is: Average Receivables / (Credit Sales / 365). Rearranging gives Credit Sales = (Average Receivables * 365) / Collection Period. Plugging in the values: ($70,060 * 365) / 31 = $824,900.

If the Collection Period of a Company Is 31 Days