If the Collection Period of a Company Is 31 Days

question 152

Multiple Choice

If the collection period of a company is 31 days, and the average receivables is $70,060, what is the total amount of the credit sales?

• A) $2,171,860
• B) $ 824,900
• C) $ 83,126
• D) $ 2,260

---

Definitions:

Inventory Holdings

The quantity of goods and materials on hand at a particular period, reflecting a company's inventory levels.

Fixed Order Costs

Expenses that do not change with the quantity of inventory ordered, such as delivery charges or processing fees.

Purchase Price

The amount paid to buy a good, service, or asset.

Collection Period

The average number of days it takes a company to collect payments after a sale has been made.