For their last fiscal year, the Short Company reported the following information. $$\begin{array} { l l }
\hline \text { Accounts } & \$ 160,000 \
\text { Receivable } & \
\text { Inventory } & \$ 204,000 \
\text { Sales } & \$ 1,168,000 \
\text { Cost of } & \$ 724,000 \
\text { Goods Sold } & \
\hline
\end{array}$$ What is the accounts receivables turnover rate?

Question

For their last fiscal year, the Short Company reported the following information. $$\begin{array} { l l } 
\hline \text { Accounts } & \$ 160,000 \
\text { Receivable } & \
\text { Inventory } & \$ 204,000 \
\text { Sales } & \$ 1,168,000 \
\text { Cost of } & \$ 724,000 \
\text { Goods Sold } & \
\hline
\end{array}$$ What is the accounts receivables turnover rate?

Quizplus · Accepted Answer

Accounts receivable turnover rate = Sales / Average accounts receivableAverage accounts receivable = (Beginning accounts receivable + Ending accounts receivable) / 2= ($160,000 + $160,000) / 2= $160,000Accounts receivable turnover rate = $1,168,000 / $160,000= 7.3

For Their Last Fiscal Year, the Short Company Reported the Following