The financial statements of the Phelps Manufacturing Company reports net sales of $500,000 and accounts receivable of $80,000 and $40,000 at the beginning of the year and end of year, respectively. What is the accounts receivable turnover for Phelps?
A) 8.3 times
B) 12.5 times
C) 6.3 times
D) 4.2 times

Question

Quizplus · Accepted Answer

Accounts receivable turnover = Net sales / Average accounts receivableAverage accounts receivable = (Beginning accounts receivable + Ending accounts receivable) / 2= ($80,000 + $40,000) / 2= $60,000Accounts receivable turnover = $500,000 / $60,000= 8.3 times

The Financial Statements of the Phelps Manufacturing Company Reports Net