If the Turnover Period for Accounts Receivable Is 8

question 36

Multiple Choice

If the turnover period for accounts receivable is 8.1 times per annum, what is the average number of days it takes to collect cash from accounts receivable?

• A)81 days.
• B)45 days.
• C)295 days.
• D)60 days.

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Definitions:

Demand

A schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time.

Price

The amount of money expected, required, or given in payment for something.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a factor, such as labor or capital.

Wage Rate

The amount of money paid to an employee per unit of time or output.