The rate at which accounts receivable turnover
A)indicates how quickly a firm collects cash.
B)equals sales revenue divided by average accounts receivable.
C)is often expressed in terms of the average number of days that elapse between the time the firm makes the sale and the time it later collects the cash.
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The rate at which accounts receivable turnover is a measure of how quickly a firm collects cash. It is calculated by dividing sales revenue by average accounts receivable and is often expressed in terms of the average number of days that elapse between the time the firm makes the sale and the time it later collects the cash. Therefore, all of the above options (A, B, and C) are correct.

The Rate at Which Accounts Receivable Turnover