At the end of the first year,the Treadwell Tire Company had net accounts receivable of $67,900 and at the end of the second year the company had net accounts receivable of $72,400.If the company's net sales revenue during the second year was $876,875,the receivables turnover ratio for the second year was:
A)12.5.
B)29.2.
C)0.08.
D)0.034.

Question

Quizplus · Accepted Answer

The receivables turnover ratio is calculated by dividing net sales by the average accounts receivable. The average accounts receivable is ($67,900 + $72,400) / 2 = $70,150. The turnover ratio is $876,875 / $70,150 = 12.5.

At the End of the First Year,the Treadwell Tire Company