Rawe Corporation's Accounts Receivable at the End of Year 2

question 208

Multiple Choice

Rawe Corporation's accounts receivable at the end of Year 2 was $329,000 and its accounts receivable at the end of Year 1 was $280,000. Sales, all on account, amounted to $1,350,000 in Year 2. The company's average collection period for Year 2 is closest to: (Round your intermediate calculations to 2 decimal places.)

• A) 1.2 days
• B) 1.0 days
• C) 82.4 days
• D) 89.0 days

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Definitions:

Consumer Surplus

The gap between what consumers are prepared and capable of paying for a product or service and the actual amount they end up paying.

Willing to Pay

The maximum amount a consumer is prepared to spend to purchase a good or service.

Actual Price

The price at which goods or services are sold in the market, often influenced by supply and demand.

Benefit Surpluses

Surplus benefits are the additional welfare or gains received by individuals or society that exceed the expected or required amounts; however, in a strict economic context, the term is uncommon and might be a misinterpretation of concepts like consumer or producer surplus.