A company has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the company's average collection period (rounded to the nearest whole day)? O 73 days. O 18 days. O 5 days. O 9 days.

A company has the following information: Net credit sales = $400,000 Net income = $100,000 Average total assets = $80,000 Average accounts receivable = $20,000 What is the company's average collection period (rounded to the nearest whole day)? O 73 days. O 18 days. O 5 days. O 9 days.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 14MC: Ancient Grains Unlimited has an accounts receivable turnover ratio of 3.34 times. The net credit...

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

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A company has the following information:
Net credit sales = $400,000
Net income = $100,000
Average total assets = $80,000
Average accounts receivable = $20,000
What is the company's average collection period (rounded to the nearest whole day)?
O 73 days.
O 18 days.
O 5 days.
O 9 days.

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