What is the company's average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period.
If accounts receivalbe change to $200,000 in the year 2009, while credit sales are $1,800,000, should I assume the firm committed to a more lenient credit policy?© BrainMass Inc. brainmass.com June 4, 2020, 12:47 am ad1c9bdddf
Accounts receivable =average daily credit sales X the average collection period.
Average daily credit sales = 1,440,000/360 = 4,000
Average collection period = 45 days
The solution explains how to calculate the average accounts receivable balance and the type of credit policy followed by the firm.