A company had net sales of $600,000, total sales of $750,000, and an average accounts receivable of $75,000. Its accounts receivable turnover equals:
A) .13
B) .80
C) 7.75
D) 8.00
E) 10.00

Question

Quizplus · Accepted Answer

Accounts receivable turnover is calculated by dividing total sales by average accounts receivable.

Accounts receivable turnover = Total sales / Average accounts receivable

In this case, total sales = $750,000 and average accounts receivable = $75,000.

Therefore, accounts receivable turnover = $750,000 / $75,000 = 8.

The closest option is 8.00, so the answer is D.

A Company Had Net Sales of $600,000, Total Sales of $750,000