With a beginning Accounts Receivable balance of $20,000,an ending balance of $26,000,and net credit sales of $408,000,compute accounts receivable turnover ratio.
A)0.05
B)20.4
C)17.7
D)68

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable
Average Accounts Receivable = (Beginning Accounts Receivable Balance + Ending Accounts Receivable Balance) / 2
Average Accounts Receivable = ($20,000 + $26,000) / 2 = $23,000
Accounts Receivable Turnover Ratio = $408,000 / $23,000 = 17.7. Therefore, the answer is option C.

With a Beginning Accounts Receivable Balance of $20,000,an Ending Balance