Winsor Clothing Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year. Net credit sales during the year amounted to $7,200,000. The average collection period of the accounts receivable in terms of days was

A) 30 days.

B) 365 days.

C) 45.1 days.

D) 42.9 days.

The correct answer is 40.6 days. None of the options is correct.

Explanation:

The average collection period of the accounts receivable is how long it takes the company to collect its accounts receivable. It is expressed as: (Average accounts receivable / Net credit sales) x 365 days.

Average collection period = [($760,000 + $840,000)/2 / $7,200,000] x 365 days =  40.6 days

This means it takes the company 40.6 days to collect its accounts receivable.

answer; the correct answer should be (demonstrations); good luck

for storing the moneys