The receivables turnover ratio is measured as:
A) Sales plus accounts receivable.
B) Sales divided by accounts receivable.
C) Sales minus accounts receivable, divided by sales.
D) Accounts receivable times sales.
E) Accounts receivable divided by sales.

Question

Quizplus · Accepted Answer

The receivables turnover ratio is calculated by dividing total sales by the average accounts receivable during the period, which measures how efficiently a company collects its receivables.

The Receivables Turnover Ratio Is Measured As