Billing's Pit Corporation has an accounts receivable turnover ratio of 3.4. What is Billing's Pit Corporation's average collection period?
A) 107 days
B) 102 days
C) 73 days
D) 55 days

Question

Quizplus · Accepted Answer

The average collection period is calculated as 365 days divided by the accounts receivable turnover ratio. So, for Billing's Pit Corporation, it's 365 / 3.4 = 107.35 days, which rounds to 107 days.

Billing's Pit Corporation Has an Accounts Receivable Turnover Ratio of 3.4