In 2016, ABC's Average Collection Period Is

question 123

Multiple Choice

In 2016, ABC's average collection period is

• A) 30 days.
• B) 32.5 days.
• C) 25 days.
• D) 35 days.

---

Definitions:

Gross Profit Rate

The gross profit rate, or gross margin, is the percentage of revenue that exceeds the cost of goods sold, which indicates the efficiency of a company in producing and selling its products.

Retail Inventory Method

An inventory valuation method used in retail, estimating inventory value by relating the end inventory cost to the sales cost.

Ending Inventory

The total value of all inventory items that a business has in stock at the end of an accounting period.

Cost of Goods Sold

The immediate expenses related to manufacturing goods for sale in a business, which encompass both materials and labor costs.