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the ward company has provided the following information: net sales totaled $850,000. beginning net accounts receivable was $70,000. ending net accounts receivable was $95,000. what was ward's average collection period?

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BinithaRidn

69.35 is the Average collection period .The time it takes for firms to turn their Accounts Receivables (AR) into cash is known as the Average Collection Period (ACP). ACP, also known as Days Sales Outstanding (DSO).

What is Average collection period?

The average collection period measures how long it typically takes a company to collect and turn its accounts receivable into cash. It is one of the six key formulas used to assess a company's short-term liquidity, or its capacity to settle its current liabilities as they become due.

Average collection period =Companies average accounts receivable/net                                 sale*365

Average collection period=70000+95000/850000

                                           = 165000/850000

                                            = 0.19

                                              =0.19*365=69.35

69.35 is the Average collection period .

The time it takes for firms to turn their Accounts Receivables (AR) into cash is known as the Average Collection Period (ACP). ACP, also known as Days Sales Outstanding (DSO), is a measure that businesses use to determine if they will have enough cash on hand to cover their immediate needs.

To learn more about Average collection period refer to:

https://brainly.com/question/27867174

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