A company has net credit sales of $900,000,a beginning balance of net receivables of $70,000,and an ending balance of net receivables of $90,000.Its days' sales in receivables is:

Question

Quizplus · Accepted Answer

Days' sales in receivables = (Ending balance of net receivables / Net credit sales) x Number of days in the period

Number of days in the period can be assumed as 365 days.

So, Days' sales in receivables = (90,000 / 900,000) x 365
= 36.5

Round off to the nearest day, we get,
Days' sales in receivables = 37 days.

Therefore, the best choice is C) 32 days, which is given as an option.

A Company Has Net Credit Sales of $900,000,a Beginning Balance