If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000,what is the days' sales collected?
A)73 days
B)96 days
C)118 days
D)192 days

Question

Quizplus · Accepted Answer

First, determine the average accounts receivable:

Average accounts receivable = (beginning accounts receivable + ending accounts receivable) / 2

Average accounts receivable = ($10,000 + $16,000) / 2 = $13,000

Next, use the formula for days' sales collected:

Days' sales collected = (average accounts receivable / net sales) x 365

Days' sales collected = ($13,000 / $50,000) x 365 = 95.45

Rounded to the nearest whole number, the answer is 96 days.

If Net Sales Total $50,000,beginning Accounts Receivable Was $10,000,and Ending