A company had an accounts receivable turnover ratio of 8 and net sales of $600,000 for a given period.What was the average accounts receivable amount for this period?
A)$4,800,000.
B)$2,919.99.
C)$205.48.
D)$75,000.
E)Average accounts receivable cannot be determined from this information.

Question

Quizplus · Accepted Answer

Accounts receivable turnover ratio = Net Sales / Average Accounts Receivable 
8 = $600,000 / Average Accounts Receivable 
Average Accounts Receivable = $75,000

A Company Had an Accounts Receivable Turnover Ratio of 8