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WAEC Accounting 2020 Paper

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Question : 20

Total: 40

Debtors and credit sales for a period are D 120,00 and D 600,00 respectively. The debtor's payment period would be

1825 days
365 days
73 days
5 days

Solution:

Concept:

The debtor payment period shows the average number of days debtors take to pay. It is calculated using:

\text{Debtor payment period} = \frac{\text{Debtors}}{\text{Credit Sales}} \times 365

Explanation:

Here, Debtors

= D\,120{,}000

and Credit Sales

= D\,600{,}000

.

Substitute the values into the formula:

\text{Payment period} = \frac{120{,}000}{600{,}000} \times 365

= 0.2 \times 365 = 73 \text{ days}

Answer:

C. 73 days

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