During the current accounting period,revenue from credit sales is $536,800.The Accounts Receivable balance is $41,184 at the beginning of the period and $41,760 at the end of the period.Which of the following statements is correct?
A)The receivables turnover ratio is 12.9.
B)On average,it takes 12.9 days to collect payment from credit customers.
C)The receivables turnover ratio is 28.3.
D)On average,the company sells its inventory every 28.3 days.

Question

Quizplus · Accepted Answer

Receivables turnover ratio = Net sales revenue ÷ Average net receivables
= $536,800 ÷ [($41,184 + $41,760)÷ 2] = 12.9
Days to collect = 365 ÷ 12.9 = 28.3

During the Current Accounting Period,revenue from Credit Sales Is $536,800