If net sales total $50,000,beginning accounts receivable was $10,000,and ending accounts receivable is 16,000,what is the receivables turnover?
A)1.9 times
B)3.1 times
C)3.8 times
D)5 times

Question

Quizplus · Accepted Answer

The formula for receivables turnover is: Net Sales / Average Accounts Receivable.

To calculate the average accounts receivable, we add the beginning and ending accounts receivable and divide by 2:

($10,000 + $16,000) / 2 = $13,000.

Plugging in the numbers:

$50,000 / $13,000 = 3.8 times.

Therefore, the answer is choice C, 3.8 times.

If Net Sales Total $50,000,beginning Accounts Receivable Was $10,000,and Ending