Question

The accounts receivable turnover is computed as __________ divided by __________.sales; accounts receivablesales; average accounts receivablesales; net incomeaccounts receivable; net income.

Answer 1

Sales; average accounts receivable

Step-by-step explanation:

The formula to compute the account receivables turnover ratio is shown below:

Accounts receivable turnover ratio = Credit sales ÷ average accounts receivable

where,

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

It shows the relationship between the net credit sales and average accounts receivable