Answer:
Average collection period
Explanation:
The average collection period represents the typical number of days between the date a credit sale is formed and the date the purchaser pays for that sale.
The average collection period is the amount of time it takes for a business to receive payments owed by its clients.
Companies calculate the typical collection period to make sure they have enough cash available to satisfy their financial obligations.
The average collection period is calculated by dividing the typical balance of account receivables by total net credit sales for the amount and multiplying the quotient by the amount of days within the period.
