Refer to the following selected financial information from Fennie's, LLC. Compute the company's accounts receivable turnover for Year 2.
A) 8.32.
B) 8.62.
C) 8.94.
D) 5.78.
E) 7.90.

Question

Refer to the following selected financial information from Fennie's, LLC. Compute the company's accounts receivable turnover for Year 2. 
A) 8.32. 
B) 8.62. 
C) 8.94. 
D) 5.78. 
E) 7.90.

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
Net Credit Sales = $450,000
Average Accounts Receivable = ($38,000 + $48,000) / 2 = $43,000
Accounts Receivable Turnover = $450,000 / $43,000 = 10.47
Therefore, the closest option is B) 8.62.

Refer to the Following Selected Financial Information from Fennie's, LLC