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