Asked by Saurav Pandey on May 08, 2024
Verified
A company had net sales of $600,000,total sales of $750,000,and an average accounts receivable of $75,000.Its accounts receivable turnover equals:
A) 0.13
B) 0.80
C) 7.75
D) 8.00
E) 10.00
Accounts Receivable Turnover
A financial metric that measures how efficiently a company collects revenue from its credit sales.
Net Sales
The amount of sales generated by a company after deducting returns, allowances, and discounts.
- Gain an understanding of the critical nature and computation process of the accounts receivable turnover.
Verified Answer
GR
Guillermo RamosMay 13, 2024
Final Answer :
D
Explanation :
Accounts receivable turnover = net sales / average accounts receivable
Accounts receivable turnover = $600,000 / $75,000
Accounts receivable turnover = 8
Therefore, the answer is D) 8.00.
Accounts receivable turnover = $600,000 / $75,000
Accounts receivable turnover = 8
Therefore, the answer is D) 8.00.
Learning Objectives
- Gain an understanding of the critical nature and computation process of the accounts receivable turnover.
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