How do You Calculate Days in Accounts Receivable?

Answer

When calculating days in accounts receivable there are two factors to consider: 1.The accounts receivable at point in time. 2.The revenue generated by the company over a specific period. Days in accounts receivable are calculated by dividing the revenue by the number of days in the period to get the average daily revenue and then dividing that number into the accounts receivable.
Q&A Related to "How do You Calculate Days in Accounts Receivable..."
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First calculate A/R turnover: A/R Turnover = Sales/ Average A/R. A/R days outstanding = Amt. of days in a year (could be 360 or 365 depending on problem) divided by A/R turnover.
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number of days since the invoice was issued to today.
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