Given an accounts receivable turnover of 10 and annual credit sales of $900,000, the average collection period is

Accounts receivable turnover = 10

Annual credit sales = $900,000

Average collection period = ?

Average collection period = 365 / Accounts receivable turnover rate

As Account receivable turnover rate is 10, so we divide 365 by 10

= 365/10 = 36.50 days

it means, 36.50 days is the average collection period.