Which of the following is the formula to compute accounts receivable turnover?
A)Net credit sales/average inventory
B)Net credit sales/average net accounts receivable
C)Cost of goods sold/average inventory
D)Average net accounts receivable/one day's sales

Question

Quizplus · Accepted Answer

Accounts receivable turnover is calculated by dividing net credit sales by the average net accounts receivable. Option A is used to calculate inventory turnover, option C is used to calculate inventory turnover ratio, and option D is used to calculate the days' sales in accounts receivable.

Which of the Following Is the Formula to Compute Accounts