Credit revenue from operations Rs5 60 000 Debtors Rs70 000 B R Rs10 000 Average Collection Period wi...........

Credit revenue from operations Rs5,60,000; Debtors Rs70,000; B/R Rs10,000. Average Collection Period will be :

52 Days

53 Days

45 Days

46 Days

- Credit Revenue from Operations: The total sales made on credit is Rs 5,60,000.

- Debtors: The amount owed by customers that is yet to be received is Rs 70,000.

- Bills Receivable (B/R): The documented claims against customers amount to Rs 10,000.

Average Collection Period = (Debtors + B/R)/Credit Revenue from Operations x 365

Debtors + B/R = Rs 70,000 + Rs 10,000 = Rs 80,000

Average Collection Period = (80,000/5,60,000) x 365 = 52.14 or 53 Days

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