If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,000.

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If a firm averages $2,000 in daily credit sales and offers 60-day terms, the average accounts receivable balance will be $120,000.

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Answer: True

Explanation for the above answer is as under

We have been provided with the information that, firm averages $2,000 in daily credit sales So daily credit sale is $ 2,000

Company offers 60-day terms

Now we will calculate , average accounts receivable balance

= Days x daily credit sales

=60  x 2000

=$ 120,000

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