Question

The 2016 financial statements of BNSF Railway Company report total revenues of $19,829 million, accounts receivable of $1,272 million for 2016 and $1,198 million for 2015. The company’s accounts receivable turnover for the year is: Select one: A. 17.0 times B. 8.9 times C. 16.1 times D. 17.9 times E. None of the above

Answer 1

C. 16.1 times

Step-by-step explanation:

Accounts receivable turnover ratio = Credit sales ÷ average accounts receivable

where,

Average accounts receivable = (Opening balance of Accounts receivable + ending balance of Accounts receivable) ÷ 2

= ($1,198 + $1,272) ÷ 2

= $1,235 million

And, the net credit sale is $ 19,829 million

Now put these values to the above formula

So, the answer would be equal to

= $19,829 million ÷ $1,235 million

= 16.1 times