Dividing net sales on account by the average amount of net accounts receivable is the calculation for the
A) accounts receivable turnover.
B) working capital turnover.
C) merchandise inventory turnover.
D) plant and equipment turnover.

Question

Quizplus · Accepted Answer

Dividing net sales on account by the average amount of net accounts receivable is the formula for calculating accounts receivable turnover. This ratio measures a company's effectiveness in collecting its accounts receivable.

Dividing Net Sales on Account by the Average Amount of Net