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.
One Comment
calculate monthly collection period from the following information .
opening debtors 18000
closing debtors 22000
Opening B/R 11000
closing B/R 9000
Total sales 2oo600
Sales Return 600
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