With a beginning Accounts Receivable balance of $70,000,an ending balance of $140,000,and net credit sales of $800,000,compute accounts receivable turnover ratio (rounded to the nearest tenth):
A)7.6.
B)11.4.
C)5.7.
D)3.8.

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated as net credit sales divided by the average accounts receivable. Average accounts receivable is ($70,000 + $140,000) / 2 = $105,000. The turnover ratio is $800,000 / $105,000 = 7.6.

With a Beginning Accounts Receivable Balance of $70,000,an Ending Balance