CatchaTan Co. of British Columbia had net sales of $800,000 over the past year. During that time, average receivables were $200,001. What was the average collection period?
A) 4 days
B) 5 days
C) 36 days
D) 48 days
E) 91 days

Question

Quizplus · Accepted Answer

The average collection period is calculated as (Average Receivables / Net Sales) * 365 days. Here, it is (200,001 / 800,000) * 365 = 0.25 * 365 = 91.25 days, rounded to 91 days.