If Accounts Receivable turnover is 10.4, this means that from the date of:
A)purchase to the date of payment is approximately 35 days.
B)sale to the date of receipt of payment is approximately 35 days.
C)discount to the date of receipt of payment is approximately 35 days.
D)invoice to the date of payment is approximately 35 days.

Question

Quizplus · Accepted Answer

Accounts Receivable turnover is a measure of how quickly a company collects its outstanding customer invoices. A turnover of 10.4 indicates that, on average, it takes approximately 35 days from the sale date to the date of receipt of payment, as calculated by 365 days divided by the turnover ratio of 10.4. Therefore, choice B is the correct answer.

If Accounts Receivable Turnover Is 10