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Collection period for accounts receivable formula

04/10/2021 Client: muhammad11 Deadline: 2 Day

The accounts receivable turnover

is a method of evaluating the solvency of net accounts receivable.

can be used to compute the average collection period.

is computed by dividing net credit sales for the accounting period by the cash realizable value of accounts receivable on the last day of the accounting period.

is only important to internal users of accounting information.

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