If the average collection period is 40 days, what is the accounts receivable turnover?
A) 8.3 times
B) 9.1 times
C) 4.6 times
D) None of these answer choices are correct.

Question

Quizplus · Accepted Answer

Accounts receivable turnover can be calculated by dividing net credit sales by average accounts receivable. However, we are not given either of these values in the question. Instead, we are given the average collection period, which is the average number of days it takes for a company to collect its receivables. To calculate the accounts receivable turnover, we can use the formula:
Accounts Receivable Turnover = 365 / Average Collection Period
Accounts Receivable Turnover = 365 / 40
Accounts Receivable Turnover = 9.1 times
Therefore, the correct answer is B.

If the Average Collection Period Is 40 Days, What Is