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Question : Read the following information carefully and answer the question

 

Particulars

 

Revenue from Operations

8,75,000

Creditors

90,000

Bills Receivable

48,000

Bills Payable

52,000

Purchases

4,20,000

Trade Debtors

59,000

 
 
Q. Calculate Average Collection Period.
 

Option 1: 30 days

Option 2:  60 days

 

Option 3:  45 days

Option 4:  15 days


Team Careers360 10th Jan, 2024
Answer (1)
Team Careers360 14th Jan, 2024

Correct Answer: 45 days


Solution : Average Collection Period = 365 Days/Trade Receivables Turnover Ratio = 365 Days/8.18 Times (Calculated in Question 4) = 45 Days

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