A company has a receivables turnover ratio of 12.The average gross accounts receivable during the period is $360,000.What is the amount of credit sales for the period?
A)$432,000
B)$3,000,000
C)$4,320,000
D)Cannot be determined from the information given.

Question

Quizplus · Accepted Answer

The receivables turnover ratio is calculated as Credit Sales divided by Average Accounts Receivable. Given the ratio is 12 and the average accounts receivable is $360,000, the credit sales can be calculated as 12 * $360,000 = $4,320,000.

A Company Has a Receivables Turnover Ratio of 12