The carrying value of a firm's account receivable is $700,000 and the average collection period is 45 days.The firm's credit sales per day are:
A)$15,555.56
B)$23,333.33
C)$700,000.00
D)$4,666,666.67
E)None of the above.

Question

Quizplus · Accepted Answer

The average collection period is the time it takes to collect receivables. If the carrying value is $700,000 and the average collection period is 45 days, then daily credit sales are $700,000 / 45 = $15,555.56.

The Carrying Value of a Firm's Account Receivable Is $700,000