The accounts receivable turnover is computed by dividing

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio measures how many times a company's accounts receivable is collected during a period. The formula for accounts receivable turnover is net credit sales divided by average accounts receivable. Since net sales already exclude sales returns and allowances, it is the best measure to use in the formula. Additionally, using the average of beginning and ending net receivables ensures that any seasonal or cyclical fluctuations in receivables are accounted for in the calculation.

The Accounts Receivable Turnover Is Computed by Dividing