What Is an Accounts Receivable Credit Balance?
The average balance of accounts receivable refers to the average number of accounts receivable during the average turnover period.
Accounts receivable average balance
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- Chinese name
- Accounts receivable average balance
- Definition
- Average number of accounts receivable during average turnover period
- Formula
- Average daily credit sales * turnover days
- Credit sales
- Accounts receivable
- The average balance of accounts receivable refers to the average number of accounts receivable during the average turnover period.
- The average balance of accounts receivable refers to the average number of accounts receivable during the average turnover period.
- Therefore, only when the daily receivables have the same amount and the receivables have the same turnover period, the average balance of receivables is equal to 2.
- The formula is as follows:
- Average balance of accounts receivable = annual net sales on credit / 360 * average days of turnover of accounts receivable
- = Average daily credit sales * accounts receivable turnover days
- (Note: Account receivable turnover days can also be called average receivable days or credit period; account receivables can also be called credit sales.)