CIMA BA3 · Chapter 13 · Question 3 of 10
A company's trade receivables at the year end are $36,000. Revenue, all on credit, was $292,000 and cost of sales was $219,000. What is the receivables collection period (to the nearest day)?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 45 days
Explanation
Receivables collection period = trade receivables / credit sales x 365 = $36,000 / $292,000 x 365 = 45.0, i.e. 45 days. Cost of sales is not used because receivables are measured at selling price.
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