A. 5 days
B. 36 days
C. 48 days
D. 73 days
The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
use the following formula:
(Average Receivables/Net Sales)*365
150,000/750,000*365 = 73 days
_________________________________________________
Net sales=750,000
A/C receivables= 150,000
days in a year =365
Collection period= (A/C Receivables/ net sales)*days in a year
= (150,000/750,000)*365= 73 days
The correct answer to the question: "Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?" is "73 days".
19 Comments
pleas send me solution
The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
150,000^750,000*365=73 days
Thanks dear Maham for explaining
Average Collection Period= (A/c Receivable/Net credit sales)*365
=(150000/750000)*365
=73 days
(150,000 divided by 750,000) x 356 days
How it comes ??
The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
use the following formula:
(Average Receivables/Net Sales)*365
150,000/750,000*365 = 73
thanks
Account Receivable Turn over Ratio= Net Credit Sales/Average Debtors
750000/150000=5
Average Collection Period= No of days in Year/A.R. Turnover Ratio
365/5=73 days
net sales=750,000
A/C receivables= 150,000
days in a year =365
Collection period= (A/C Receivables/ net sales)*days in a year
= (150,000/750,000)*365
The average collection period is calculated by dividing the average balance of accounts receivable by total net credit sales for the period and multiplying the quotient by the number of days in the period.
150,000/750,000*365=73
Average receiveable/ net sale ×365 days
365/750000=…..
Then
And answer ko 150000 sy multiple krdo
Average collection period ajaye ga
Which is 73
Receivables= 150000
Net sales= 750000
Average Collection?
Average Collection= Receivable /Net Sales * 365
Average Collection= 150000/750000*365=73 days
Please send the formula to me