Asked by Matthew Bahramian on Jun 12, 2024
Verified
The accounts receivable turnover is calculated by:
A) Dividing net sales by average accounts receivable.
B) Dividing net sales by average accounts receivable and multiplying by 365.
C) Dividing average accounts receivable by net sales.
D) Dividing average accounts receivable by net sales and multiplying by 365.
E) Dividing net income by average accounts receivable.
Accounts Receivable Turnover
A financial ratio that measures how many times a company collects its average accounts receivable balance within a specific period.
Net Sales
The net sales revenue of a company, calculated after deducting returns, allowances for damage or loss, and any discounts.
- Comprehend the importance and methodology involved in calculating the accounts receivable turnover.
Verified Answer
DS
devinder sandhuJun 14, 2024
Final Answer :
A
Explanation :
The accounts receivable turnover is calculated by dividing net sales by average accounts receivable. This ratio measures how efficiently a company collects its receivables.
Learning Objectives
- Comprehend the importance and methodology involved in calculating the accounts receivable turnover.
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