ACCA FM · Chapter 3 · Question 7 of 10
A company's credit sales for the year were $4.8m and its trade receivables at the year end were $720k. What is the trade receivables collection period, using a 365-day year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 54.8 days
Explanation
Receivables days = trade receivables / credit sales x 365 = 720 / 4,800 x 365 = 54.8 days (rounded to 1 decimal place). The figure of 6.7 is the receivables turnover in times per year, 7.8 is the collection period in weeks rather than days, and 54.0 wrongly uses a 360-day year.
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