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A company has net sales of $2,475,000 and average accounts receivable, net of $450,000. What is its accounts receivable turnover for the period?Multiple Choice83.000.4510.0027.505.50

Question

A company has net sales of 2,475,000andaverageaccountsreceivable, netof2,475,000 and average accounts receivable, net of 450,000. What is its accounts receivable turnover for the period?Multiple Choice83.000.4510.0027.505.50

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Solution

The accounts receivable turnover is calculated by dividing the net credit sales by the average accounts receivable during the same period.

In this case, the net sales are 2,475,000andtheaverageaccountsreceivableis2,475,000 and the average accounts receivable is 450,000.

So, the accounts receivable turnover would be 2,475,000/2,475,000 / 450,000 = 5.50

Therefore, the accounts receivable turnover for the period is 5.50.

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