Compute the average debtor collection period for a company with Accounts Receivable (Debtors) outstanding totaling 14,000 and
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Compute the average debtor collection period for a company with Accounts Receivable (Debtors) outstanding totaling €14,000 and annual sales of €132,000. If the maximum credit period granted by the company is 21days, what might explain the difference in the average collection period? What questions does this raise and what suggestions could you make to management that might improve the situation?
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