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Given an accounts receivable turnover of 10 and annual credit sales of $900,000, the average collection period is

Respuesta :

Accounts receivable turnover = 10
Annual credit sales = $900,000
Average collection period = ?
Average collection period = 365 / Accounts receivable turnover rate
As Account receivable turnover rate is 10, so we divide 365 by 10
= 365/10 = 36.50 days
it means, 36.50 days is the average collection period.

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