Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?
Correct answer: D. 73 daysBusiness & Industrial
- A. 5 days
- B. 36 days
- C. 48 days
- D. 73 daysBusiness & Industrial
Explanation
Average collection period equals average receivables divided by net sales, multiplied by 365: (150,000 ÷ 750,000) × 365 = 73 days. This indicates how long sales remain outstanding on average.
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