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    Compute accounts receivabl, turnover; discounts

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    A firm has $400,000 in credit sales and $100,000 in accounts receivable. Compute accounts receivable turnover and average number of collection days. How do these numbers relate to the terms of 2/10, n/30?

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    credit sales 400000
    accounts receivables 100000
    receivables turnover= net credit sales/accounts receivables 4
    average collection period=(365 days*accounts receivables)/net credit sales 91.25

     How do these numbers relate  to the terms of 2/10, ...

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    This solution helps with a question about account receivable, turnover and discounts.