Your company has net sales of $468,300 and average net receivables of $111,500 for the year.Which of the following statements is correct? (Round all calculations to one decimal place.)
A) The receivables turnover ratio is 4.2 and the days-to-collect is 0.01.
B) The receivables turnover ratio is 0.2 and the days-to-collect is 1,520.
C) The receivables turnover ratio is 4.2 and the days-to-collect is 86.9.
D) The receivables turnover ratio is 0.2 and the days-to-collect is 87.6.

Question

Quizplus · Accepted Answer

Receivables turnover ratio = Net Sales / Average Net Receivables
= $468,300 / $111,500 = 4.2
Days-to-collect = 365 days / Receivables turnover ratio
= 365 / 4.2 = 86.9 
Therefore, the correct statement is: The receivables turnover ratio is 4.2 and the days-to-collect is 86.9.

Your Company Has Net Sales of $468,300 and Average Net