Martin Sales provides the following information: Net credit sales: $750,000
Beginning net accounts receivable: $40,000
Ending net accounts receivable: $20,000
Calculate the accounts receivable turnover ratio. (Round to the nearest whole number.)

Question

Quizplus · Accepted Answer

The formula for accounts receivable turnover ratio is: Net credit sales / Average accounts receivable. To calculate the average accounts receivable, we add the beginning and ending net accounts receivable and divide by 2: ($40,000 + $20,000) / 2 = $30,000. Therefore, the accounts receivable turnover ratio is $750,000 / $30,000 = 25 times. Round to the nearest whole number, the answer is B.

Martin Sales Provides the Following Information: Net Credit Sales: $750,000