Question

Logan Sales provides the following​ information: Net credit​ sales: $ 750 comma 000 Beginning net accounts​ receivable: $ 45 comma 000 Ending net accounts​ receivable: $ 24 comma 000 Calculate the accounts receivable turnover ratio.​ (Round your answer to the nearest whole​ number.)

Answer 1

Accounts receivables turnover ratio = 21.74 times

Step-by-step explanation:

The accounts receivables turnover can be calculated by dividing the net of credit sales by the average of the accounts receivables for the year. The formula for accounts receivables turover can be written as,

Accounts Receivables turnover = Net credit sales / Average accounts receivables

Where, Average accounts receivables = (Opening Accounts receivables + Closing Accounts receivables) / 2

So, Accounts receivables turnover = 750000 / [(45000 + 24000) / 2] = 21.739 times