Accounts receivable turnover is calculated as:
A) total cost of goods sold / 365 days
B) total net credit sales / average net accounts receivable
C) average net accounts receivable / 365 days
D) total net credit sales / cost of goods sold

Question

Quizplus · Accepted Answer

Accounts receivable turnover is a ratio that indicates how many times a company collects its average accounts receivable during a given period. The formula for the accounts receivable turnover ratio is total net credit sales divided by average net accounts receivable. Option A calculates the average daily cost of goods sold, option C calculates the average daily net accounts receivable, and option D divides net credit sales by cost of goods sold, which gives a gross profit ratio.

Accounts Receivable Turnover Is Calculated As