Accounts Receivable Turnover measures
A) how frequently during the year the accounts receivable are converted to cash
B) the number of days of accounts receivable outstanding
C) the fair market value of accounts receivable
D) the efficiency of the accounts payable function

Question

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Accounts Receivable Turnover measures how frequently during the year the accounts receivable are converted to cash. It is calculated by dividing net credit sales by the average accounts receivable. This ratio helps in assessing the efficiency of a company in collecting the money owed by its customers.

Accounts Receivable Turnover Measures