Answered: A company has average accounts…

A company has average accounts receivable of Rs. 10,00,000 and annual credit sales of Rs.60,00,000. Its average collection period would be a. 60.83 days b. 6.08 days c. 1.67 days d. 0.67 days

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 12Q: Berry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales...

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Question

A company has average accounts receivable of Rs. 10,00,000 and annual credit sales of Rs.60,00,000. Its average collection period would be

60.83 days

6.08 days

1.67 days

0.67 days

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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