Wiseman Bookstores has an accounts receivable turnover of 12.This means that
A) the company sells and replaces its merchandise inventory twelve times each year.
B) one-twelfth of the company's assets are financed by creditors.
C) the company's sales figure is twelve times its accounts receivable figure.
D) the company collects its accounts receivable about every thirty days.
E) the company had $12 in assets for every $1 of current liabilities.

Question

Quizplus · Accepted Answer

An accounts receivable turnover of 12 means that the company collects its accounts receivable about every thirty days. This is calculated by dividing the company's net credit sales by its average accounts receivable balance.

Wiseman Bookstores Has an Accounts Receivable Turnover of 12