The following information was extracted from the financial records of Goss Ltd for the year ended 30 June 2014:
$$\begin{array} { l r }
\text { Cash Sales } & \$ 30,000 \
\text { Credit Sales } & 180,000 \
\text { Accounts receivable } & 25,000 \
\text { Cost of Sales } & 130,000
\end{array}$$
If there are 365 trading days per year,calculate for the managing director the number of days that accounts receivable are outstanding at 30 June 2014.
A) 86 days.
B) 51 days.
C) 114 days.
D) 43 days.

Question

The following information was extracted from the financial records of Goss Ltd for the year ended 30 June 2014:
$$\begin{array} { l r } 
\text { Cash Sales } & \$ 30,000 \
\text { Credit Sales } & 180,000 \
\text { Accounts receivable } & 25,000 \
\text { Cost of Sales } & 130,000
\end{array}$$
If there are 365 trading days per year,calculate for the managing director the number of days that accounts receivable are outstanding at 30 June 2014.
A) 86 days.
B) 51 days.
C) 114 days.
D) 43 days.

Quizplus · Accepted Answer

The number of days accounts receivable are outstanding is calculated as: (Accounts Receivable / Credit Sales) * 365 = (25,000 / 180,000) * 365 ≈ 51 days.

The Following Information Was Extracted from the Financial Records of Goss