Question

A company had total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:

a. .13
b. .80
c. 7.75
d. 8.00
e. 10.00

Answer 1

The accounts receivable turnover equals 10.00. The correct answer is option E.

Step-by-step explanation:

To calculate the accounts receivable turnover, we divide the total sales by the average accounts receivable. In this case, the company had total sales of $750,000 and an average accounts receivable of $75,000. Therefore, the accounts receivable turnover equals:

Accounts receivable turnover = Total sales / Average accounts receivable

Accounts receivable turnover = $750,000 / $75,000 = 10.00