The average collection period for 2010 is (use average accounts receivable):
A) 10.56 days.
B) 12.36 days.
C) 23.66days.
D) 17.10 days.
E) 126.74 days.

Question

Quizplus · Accepted Answer

The formula for average collection period is (Accounts Receivable / Average Sales per day).
We are given that the average accounts receivable is $600,000, and total credit sales were $12,315,000. 
Therefore, the average sales per day is $12,315,000 / 365 = $33,739.73.
The average collection period is ($600,000 / $33,739.73) = 17.10 days. 
Thus, the best answer is D.

The Average Collection Period for 2010 Is (Use Average Accounts