Leary Corporation had net credit sales during the year of $1,200,000 and cost of goods sold of $720,000.The balance in accounts receivable at the beginning of the year was $120,000 and at the end of the year was $180,000.What was the accounts receivable turnover?
A)8.0
B)10.0
C)6.7
D)4.8

Question

Quizplus · Accepted Answer

The accounts receivable turnover is calculated as net credit sales divided by the average accounts receivable. Average accounts receivable is ($120,000 + $180,000) / 2 = $150,000. Thus, the turnover is $1,200,000 / $150,000 = 8.0.

Leary Corporation Had Net Credit Sales During the Year of $1,200,000