Calculate the Average Collection Period for Dots Inc

question 72

Multiple Choice

Calculate the average collection period for Dots Inc.if its accounts receivables were $550 at the beginning of a year in which the firm generated $3,000 of sales?

• A) 60 days
• B) 61 days
• C) 67 days
• D) 73 days

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Definitions:

Special Journal

A financial journal designed for recording a specific type of transaction, helping in streamlining and categorizing financial entries.

Cash Receipts Journal

An accounting journal used to record all receipts of cash, including sales made for cash and payments received from debtors.

Accounts Receivable Journal

A ledger used to record sales transactions where payment is to be received in the future, detailing each customer’s purchase on credit.

Purchases Journal

A specialized accounting journal used to record the purchasing of goods and services on credit.