A company has an accounts receivable turnover of 10. The average net accounts receivable during the period are $900,000. What is the amount of net credit sales for the period?
A) $90,000
B) $9,000,000
C) $900,000
D) $990,000

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable
10 = Net Credit Sales / $900,000
Net Credit Sales = 10 x $900,000
Net Credit Sales = $9,000,000

A Company Has an Accounts Receivable Turnover of 10