Question

Delta Distributors has accounts receivable of $2,750,000 and average daily credit sales of $118,280. The firm offers credit terms of 2/10, net 30. On average, what is the firm's accounts receivable period?

Answer 1

The firm's average accounts receivable period is approximately 23.25 days.

Step-by-step explanation:

To calculate the firm's average accounts receivable period, we need to divide the total accounts receivable by the average daily credit sales. The formula is:

Accounts Receivable Period = Total Accounts Receivable / Average Daily Credit Sales

Using the given information, the calculation would be:

Accounts Receivable Period = $2,750,000 / $118,280 = 23.25 days

Therefore, the firm's average accounts receivable period is approximately 23.25 days.