What is the average number of days the business takes to collect its debts?
A - HSC - SSCE Business Studies - Question 20 - 2018 - Paper 1
Question 20
What is the average number of days the business takes to collect its debts?
A. 15 days
B. 25 days
C. 29 days
D. 30 days
Worked Solution & Example Answer:What is the average number of days the business takes to collect its debts?
A - HSC - SSCE Business Studies - Question 20 - 2018 - Paper 1
Step 1
Determine the Average Collection Period
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Answer
To determine the average number of days it takes for the business to collect its debts, we typically refer to the accounts receivable collection period, which tells us how long it takes on average for a company to receive payments owed by its customers.
Step 2
Analyze Provided Options
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Answer
Given the options provided:
A. 15 days
B. 25 days
C. 29 days
D. 30 days
We need to identify which option reflects a reasonable timeframe for collection based on common industry standards.
Step 3
Select the Correct Answer
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Answer
Based on typical industry practices and the average time it takes businesses to collect payments, the most plausible answer is B. 25 days.
