If the Collection Period of a Company Is 60 Days

question 26

Multiple Choice

If the collection period of a company is 60 days, and the average receivables are $90,000 what is the total amount of the credit sales? (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

• A)$1500
• B)$14,795
• C)$90,000
• D)$547,500

---

Definitions:

Fixed Assets

Tangible or intangible items owned by a business that are used over a long period of time for the operation of the business, such as buildings, machinery, or equipment.

Working Capital

The disparity between an organization's immediate assets and liabilities, revealing its short-term fiscal stability and operational effectiveness.

Short-Term Liabilities

Financial obligations of a business that are due to be paid within one year.

Spontaneously

Occurring without external cause, acting or done impulsively and without premeditation.