Mccaughey Corporation's most recent balance sheet and income statement appear below:

-The average collection period for Year 2 is closest to:
A) 1.2 days
B) 0.9 days
C) 40.9 days
D) 37.9 days

Question

Mccaughey Corporation's most recent balance sheet and income statement appear below:

-The average collection period for Year 2 is closest to:
A) 1.2 days 
B) 0.9 days 
C) 40.9 days 
D) 37.9 days

Quizplus · Accepted Answer

The average collection period is calculated by dividing the number of days in the period by the receivables turnover ratio. Without specific data, the closest reasonable estimate is 40.9 days based on typical business cycles.

Mccaughey Corporation's Most Recent Balance Sheet and Income Statement Appear