Hayes Company Had an Average Age of Accounts Receivable of 25

question 29

Multiple Choice

Hayes Company had an average age of accounts receivable of 25 days and net credit sales of $31,000. Assume a 365-day year. What was the amount of the average net receivables?

• A) $1,152
• B) $2,123
• C) $4,000
• D) $5,760

---

Definitions:

Compounded Interest

Interest that is computed on both the original amount of money and the interest it has already earned over past periods, whether it’s a savings or a loan.

Investments

Assets or items acquired with the intention of generating income or appreciating in value over time.

Annually

Occurring once every year; relating to a period or cycle of one year.

Compounded Annually

A technique for computing interest in which the interest accrued annually is compounded to the principal amount, resulting in a balance that not only expands but does so at an accelerating pace.