If the net credit sales are $850,000, net receivables for 2007 were $130,000, and $210,000 for 2008, which of the following is correct?

Name: If the net credit sales are $850,000, net receivables for 2007 were $130,000, and $210,000 for 2008, which of the following is correct?
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Quizplus · Accepted Answer

The accounts turnover is calculated as net credit sales divided by average net receivables. Average net receivables = ($130,000 + $210,000) / 2 = $170,000. Accounts turnover = $850,000 / $170,000 = 5.00.

If the Net Credit Sales Are $850,000, Net Receivables for 2007