Average Collection Period: Formula & Analysis

Instructions:

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question 1 of 3

Which is the correct formula to use to calculate the accounts receivable turnover ratio.

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1. Which financial statements are needed to find credit sales and accounts receivable?

2. Which formula will produce the average collection period?

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About This Quiz & Worksheet

The quiz and worksheet will assess your acumen of the average collection period. Nuts and bolts of the lesson can be learned via important study points, such as the formula used to calculate the accounts receivable turnover ratio.

Quiz & Worksheet Goals

Use these accessible materials to:

  • Signify the necessary financial statements required to assess credit sales and accounts receivable
  • Name the formula which will yield the average collection period
  • Understand what the accounts receivable turnover ratio represents
  • Recognize what is exemplified by the average collection period

Skills Practiced

Here are a few ways to map your understanding of the subject:

  • Critical thinking - apply relevant concepts to examine information about credit sales in a different light
  • Distinguishing differences - compare and contrast topics from the lesson, such as average collection period and accounts receivable
  • Knowledge application - use your knowledge to answer questions about the average collection period

Additional Learning

Use the lesson entitled Average Collection Period: Formula & Analysis to gain more perspective about the average collection period. This useful lesson covers the following:

  • Define average collection period
  • Understand the purpose of an accounts receivable turnover
  • Analyze credit policy and how it is used
  • Recognize the importance of the collection period and the credit term period
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