Excerpts from Sydner Corporation's most recent balance sheet appear below: Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The accounts receivable turnover for Year 2 is closest to:

Question

Excerpts from Sydner Corporation's most recent balance sheet appear below:  Sales on account in Year 2 amounted to $1,390 and the cost of goods sold was $900. The accounts receivable turnover for Year 2 is closest to:

Quizplus · Accepted Answer

Accounts receivable turnover = Sales on account ÷ Average accounts receivable balance
= $1,390 ÷ $220* = 6.32 (rounded)
*Average accounts receivable balance = ($210 + $230)÷ 2 = $220

Excerpts from Sydner Corporation's Most Recent Balance Sheet Appear Below