Calculate the average collection period for Dotte Inc.if its accounts receivables were $500 and $600 at the end of each of the last two years,and its revenue over the last year was $3,000.
A) 60 days
B) 61 days
C) 67 days
D) 73 days

Question

Quizplus · Accepted Answer

The average collection period is calculated as (Average Accounts Receivable / Revenue) * 365. The average accounts receivable is ($500 + $600) / 2 = $550. Therefore, the average collection period is ($550 / $3000) * 365 = 66.83 days, which rounds to 67 days.

Calculate the Average Collection Period for Dotte Inc