A company has net sales on account of $1,750,000. Net accounts receivable at the beginning of the year are $147,000 and net accounts receivable at the end of the year are $153,000. The accounts receivable turnover is
A) 11.9.
B) 11.7.
C) 11.4.
D) 1.0.

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Sales ÷ Average Accounts Receivable

Average Accounts Receivable = (Net Accounts Receivable at the Beginning of the Year + Net Accounts Receivable at the End of the Year) ÷ 2

= ($147,000 + $153,000) ÷ 2

= $150,000

Therefore, Accounts Receivable Turnover = $1,750,000 ÷ $150,000 = 11.7

The correct answer is B.

A Company Has Net Sales on Account of $1,750,000