Bill's Dollar Store had a balance in the Accounts Receivable account of $760,000 at the beginning of the year and a balance of $840,000 at the end of the year.Net credit sales during the year amounted to $6,400,000.The accounts receivable turnover was

Question

Quizplus · Accepted Answer

Accounts Receivable Turnover = Net Credit Sales / Average Accounts Receivable

Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Average Accounts Receivable = ($760,000 + $840,000) / 2 = $800,000

Accounts Receivable Turnover = $6,400,000 / $800,000 = 8 times

Therefore, the best choice is C, 8.0 times.

Bill's Dollar Store Had a Balance in the Accounts Receivable