Question

The accounts receivable turnover is computed as __________ divided by __________. sales; accounts receivable sales; average accounts receivable sales; net income accounts receivable; net income 2. Financial data for Greene Company follows: Sales $825,000 Accounts receivable: Beginning of year 75,000 End of year 87,000 Net income 1,500,000 What is Greene Company's accounts receivable turnover

Answer 1

Answer and Explanation:

The computation is shown below:

As we know that

Account receivable turnover is

= Sales ÷ average account receivable

So, sales; average accounts receivable is considered

2. Now the account receivable turnover ratio is

Average receivable is

= ($75,000 + $87,000) ÷ 2

= $81,000

So,

Account receivable turnover ratio is

= $825,000 ÷ $81,000

= 10.20 times