Question : 12,00,000 in credit sales and 2,40,000 in debts were owed by ABC Ltd. at the conclusion of the year. With a year of 360 days,what will be the average collection period?
Option 1: 180 Days
Option 2: 60 Days
Option 3: 80 Days
Option 4: 72 Days
Answer (1)
14th Jan, 2024
Correct Answer: 72 Days
Solution :
Average Collection Period = Debtors / Credit Sales × 360
= 2,40,000 /1 2,00,000 × 360
= 72 days
Hence option 4 is the correct answer.
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