A company has a accounts receivable turnover of 10 times. The average accounts receivable during the period are $400000. What is the amount of net credit sales for the period?
A) $40000
B) $4000000
C) $400000
D) Cannot be determined from the information given

Question

Quizplus · Accepted Answer

Accounts receivable turnover = Net credit sales / Average accounts receivable
10 times = Net credit sales / 400000
Net credit sales = 10 times 400000 = $4000000

A Company Has a Accounts Receivable Turnover of 10 Times