The industry average receivables collection period:
Mary Gonzales is evaluating companies in the office supply industry and has compiled
the following information:
20X1 20X2
Company Credit Sales ($)
Average Receivables
Balance ($) Credit Sales ($)
Average Receivables
Balance ($)
A 5.0 million 1.0 million 6.0 million 1.2 million
B 3.0 million 1.2 million 4.0 million 1.5 million
C 2.5 million 0.8 million 3.0 million 1.0 million
D 0.5 million 0.1 million 0.6 million 0.2 million
Industry 25.0 million 5.0 million 28.0 million 5.4 million
A. increased from 20X1 to 20X2.
B. decreased from 20X1 to 20X2.
C. did not change from 20X1 to 20X2.
Answer: B. decreased from 20X1 to 20X2.
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