Use the following information for questions 64 through 69.
The following data are provided: Additional information:
Depreciation included in cost of goods sold and operating expenses is $610,000. On May 1, 2015, 30,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2015.
-The accounts receivable turnover for 2015 is
A) 6,400 ÷ 800.
B) 4,200 ÷ 800.
C) 6,400 ÷ 700.
D) 4,200 ÷ 700.

Question

Use the following information for questions 64 through 69.
The following data are provided:  Additional information:
Depreciation included in cost of goods sold and operating expenses is $610,000. On May 1, 2015, 30,000 shares of common stock were issued. The preferred stock is cumulative. The preferred dividends were not declared during 2015.
-The accounts receivable turnover for 2015 is
A) 6,400 ÷ 800. 
B) 4,200 ÷ 800. 
C) 6,400 ÷ 700. 
D) 4,200 ÷ 700.

Quizplus · Accepted Answer

The accounts receivable turnover ratio is calculated by dividing the net credit sales by the average accounts receivable. Choice C correctly represents this calculation with hypothetical numbers, assuming 6,400 represents net credit sales and 700 represents average accounts receivable.

Use the Following Information for Questions 64 Through 69