Calculate the Average Collection Period for Dotte Inc

question 5

Multiple Choice

Calculate the average collection period for Dotte Inc.if its accounts receivables were $500 and $600 at the end of each of the last two years, and its revenue over the last year was $3,000.

• A)69 days
• B)68 days
• C)67 days
• D)66 days

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Definitions:

Total Liabilities

The combined debts and obligations that a company owes to outside parties at any given time.

Accrued Expenses

Expenses that have been incurred but not yet paid for, often recognized in accounting through an adjusting entry.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset's value over time.

Record Depreciation Expense

The process of allocating the cost of tangible assets over their useful lives to accurately reflect their consumption and wear and tear.