Average collection period: Average collection period refers to the way to express the efficiency measure. It can be calculated using accounts receivable turnover by dividing the number of days in the period. Formula: Average collection period= 365 days Receivables turnover ratio To determine : The average collection period of receivables measured and indication of this ratio and higher or lower average collection period preferable.

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Chapter 5, Problem 22RQ

To determine

Average collection period:

Average collection period refers to the way to express the efficiency measure. It can be calculated using accounts receivable turnover by dividing the number of days in the period.

Formula:

Average collection period=365daysReceivables turnover ratio

To determine: The average collection period of receivables measured and indication of this ratio and higher or lower average collection period preferable.

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