Which of the following is calculated by dividing net sales by average accounts receivable?
A)Days to sell ratio.
B)Current ratio.
C)Profit margin.
D)Accounts receivable turnover ratio.

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing the net sales by the average accounts receivable. This ratio measures how quickly a company collects its accounts receivable, which is important for determining the efficiency of its cash flow and credit policies. The other options listed are not calculated in this way.

Which of the Following Is Calculated by Dividing Net Sales