The following balance sheet information was provided by O'Connor Company: Assuming that net credit sales for Year 2 totaled $270,000, what is the company's most recent accounts receivable turnover?
A) 18 times
B) 20 times
C) 22.5 times
D) 7.7 times

Question

The following balance sheet information was provided by O'Connor Company:  Assuming that net credit sales for Year 2 totaled $270,000, what is the company's most recent accounts receivable turnover?
A) 18 times 
B) 20 times 
C) 22.5 times 
D) 7.7 times

Quizplus · Accepted Answer

Accounts receivable turnover = Net credit sales ÷ [(Beginning accounts receivable + ending accounts receivable) ÷ 2]
Accounts receivable turnover = $270,000 ÷ [($12,000 + $15,000) ÷ 2] = $270,000 ÷ $13,500 = 20 times

The Following Balance Sheet Information Was Provided by O'Connor Company