On Average Your fiRm Sells $26,500 of Items on Credit

question 248

Multiple Choice

On average your firm sells $26,500 of items on credit each day. Your average operating cycle is 51 days and your firm acquires and sells inventory on average every 19 days. What is your average
Accounts receivable balance?

• A) $503,500
• B) $848,000
• C) $1,012,500
• D) $1,315,500
• E) $1,855,000

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Definitions:

Annual Salary

The total earnings of an individual from their job before taxes and other deductions, calculated on a yearly basis.

Merchandise

Goods that are bought and sold in business.

Biweekly

Every two weeks.

Algebraically

Pertaining to the use of symbols and the rules for manipulating those symbols in mathematics to solve equations or express formulas.