Average Collection Period | Calculator | Example

Average Collection Period Formula

The formula to find out average collection period is

Average Collection Period = Total Accounts Receivable / Credit Sales Per day.

Here, the Total accounts receivable = Debtors + Bills receivable.

Calculation of Average Collection Period

Calculate Average Collection Period from the following information.

Sankaram k Co makes both cash sales and credit sales. From the following information, calculate the average collection period.

Note: While calculating average collection period, only good sundry debtors should be taken into account. Hence Reserve for Doubtful Debts should be deducted from closing debtors. However, some authors do not hold this view. In that case, average collection period will be 55 days.

Leave a Reply

Recent Posts


Related pages

characteristic of perfect competitioncharacteristics of capitalist societyinvestment fluctuation reserverepresentative money advantages and disadvantageswhat is marketing skimmingexamples of probability and nonprobability samplingmeaning of merits and demeritsmeaning of alphanumericmonetary policy rbiexample of a conglomeraterupee equal to dollarimportances of budgetingstrengths and weaknesses of stratified samplingadvantages and disadvantages of being a franchisewhat are consumable storesvoid and voidable contractprivity of contract meansaverage debtors formuladirect vs indirect exportingdisadvantages of traditional costingrbi policiesconsumer socialization definitionzero based costing definitionessential of valid contract in business lawvijay tv advertisementprobability sampling techniques examplesdifference between merger and consolidationhorizontal and vertical mergerswhat is meant by urbanizationcentralization and decentralization of authoritydisadvantages of decentralised structuredifference between stratified sampling and cluster samplingcontract costing definitionadvantage and disadvantage of internet bankingdefinition amalgamatedvoidable contractexample of nominal damagesforfeited sharesautocratic leaders definitionwhat is privity of contractfeatures of good forecasting methodsdefinition of consumer behavior by kotlerdisadvantages of radio advertisingexplain marginal costingadvantages of franchisorwhat are the advantages and disadvantages of brandingadvantages and disadvantages of oligopolywhat is operating lease and finance leaseswap transaction in forex marketlisting of securities wikipediadelegations meaningadvantages and disadvantages of advertisementsadvantages and disadvantages of waterwaysmeaning of speculatingvadodara stock exchangerepresentative sample definition sociologyirredeemable debenturesprobabilistic sampling techniquescapital budgeting phasesadvantages and disadvantages of mixed economy pdfrevaluation method of depreciationdisadvantages of tqmadvantage of budgetary controlusage variance formuladefinition urbanizationdefinition demotionconsumer buying motivesinventory carrying cost definitionppt on indian stock marketcost variance definitionenterprize definitioncommercial impracticability definitionadvantages and disadvantages of the imfmeaning of stratified sampling