Bill's Dollar Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year. Net credit sales during the year amounted to $6,400,000. The accounts receivable turnover was
A) 7.6 times.
B) 8.4 times.
C) 8.0 times.
D) 4.0 times.

Question

Quizplus · Accepted Answer

The accounts receivable turnover is calculated by dividing net credit sales by the average accounts receivable. The average accounts receivable is ($760,000 + $840,000) / 2 = $800,000. Therefore, the turnover is $6,400,000 / $800,000 = 8.0 times.

Bill's Dollar Store Had a Balance in the Accounts Receivable