In 2005,The Best Donut Shop had cash sales of 83,684 and total sales of 176,413.Accounts Receivable were 3,275.What was Accounts Receivable Turnover?

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover can be calculated by dividing total sales by the average accounts receivable. To find the average accounts receivable, we add the beginning and ending accounts receivable and divide by two.

Beginning Accounts Receivable = $0 
Ending Accounts Receivable = $3,275

Average Accounts Receivable = ($0 + $3,275) / 2 = $1,637.50

Accounts Receivable Turnover = $176,413 / $1,637.50 = 107.71

Therefore, the Accounts Receivable Turnover for The Best Donut Shop was 28.31 (rounded to two decimal places). The best choice is B.

In 2005,The Best Donut Shop Had Cash Sales of 83,684