The accounts receivable turnover rate:
A)Indicates how many times the receivables were converted into cash during the year.
B)Is computed by dividing average receivables by sales.
C)Indicates the average number of days a business waits to make collection on a credit sale.
D)Indicates the proportion of a company's accounts receivable that the independent auditors were unable to confirm.

Question

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The accounts receivable turnover rate measures how efficiently a company is able to collect its accounts receivable by measuring the number of times accounts receivable are converted to cash during a given period. It is calculated by dividing net credit sales by average accounts receivable.

The Accounts Receivable Turnover Rate