All other things the same, when a customer purchases an item for cash, the accounts receivable turnover ratio increases.

Name: All other things the same, when a customer purchases an item for cash, the accounts receivable turnover ratio increases.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing net credit sales by the average accounts receivable. When a customer purchases an item for cash, it is not considered a credit sale, and therefore does not impact the ratio.

All Other Things the Same, When a Customer Purchases an Item