A company had an accounts receivable turnover ratio of 12 and net sales of $744,000 for a given period.What was the average amount of accounts receivables for this period?
A)$8,928,000
B)$62,000
C)$4,380
D)$169.86
E)Average accounts receivable cannot be determined from this information.

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated as net sales divided by average accounts receivable. Given the turnover ratio of 12 and net sales of $744,000, the average accounts receivable can be calculated as $744,000 / 12 = $62,000.

A Company Had an Accounts Receivable Turnover Ratio of 12