Definition

Average collection period

Average collection period means the average amount of time that a receivable is outstanding; calculated by dividing 365 days by the accounts receivables turnover ratio.

Share it:  Cite

More from this Section

  • Operational Audit
    Operational Audit is an extension of internal auditing to all the operations and the activities ...
  • Consigned goods
    Consigned goods referred as goods that held for sale by one party (the consignee) although ...
  • Capital reserve
    The term ‘Capital reserve’ has not been defined by the Companies Act except negatively ...
  • Budget
    A budget is a formal written statement of management’s plans for a specified future ...
  • Nonoperating activities
    Nonoperating activities consist of various revenues and expenses and gains and losses ...