{"id":48065,"date":"2024-04-15T22:35:53","date_gmt":"2024-04-15T22:35:53","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=48065"},"modified":"2024-04-15T22:35:53","modified_gmt":"2024-04-15T22:35:53","slug":"if-credit-sales-for-the-year-is-rs-540000-and-debtors-at-the-end-of-year-is-rs-90000-the-average-collection-period-will-be","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/if-credit-sales-for-the-year-is-rs-540000-and-debtors-at-the-end-of-year-is-rs-90000-the-average-collection-period-will-be\/","title":{"rendered":"If credit sales for the year is Rs 5,40,000 and Debtors at the end of year is Rs 90,000 the Average Collection Period will be"},"content":{"rendered":"

[amp_mcq option1=”30 days” option2=”61 days” option3=”90 days” option4=”120 days” correct=”option2″]<\/p>\n

The correct answer is: B. 61 days<\/p>\n

Average collection period is the average number of days it takes a company to collect its outstanding receivables. It is calculated by dividing the total amount of accounts receivable by the average daily sales.<\/p>\n

In this case, the total amount of accounts receivable is Rs 90,000 and the average daily sales is Rs 5,40,000 \/ 365 = Rs 1,481.48. Therefore, the average collection period is 90,000 \/ 1,481.48 = 61 days.<\/p>\n

Option A is incorrect because it is the number of days in a month, not the average collection period. Option C is incorrect because it is the number of days in a quarter, not the average collection period. Option D is incorrect because it is the number of days in a year, not the average collection period.<\/p>\n","protected":false},"excerpt":{"rendered":"

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