Accounts receivable on January 1 was $30,000 and,at the end of the year it was $50,000.Net credit sales were $200,000.Accounts receivable turnover is:
A)2.5 times.
B)4 times.
C)5 times.
D)6.67 times.

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Average Accounts Receivable = ($30,000 + $50,000) / 2 = $40,000

Accounts Receivable Turnover = $200,000 / $40,000 = 5 times

Accounts Receivable on January 1 Was $30,000 And,at the End