The accounts receivable turnover rate for Baldwin Corporation is 8,and for Basinger Company the turnover rate is 10.These statistics indicate that:
A)Basinger collects its accounts receivable within 10 days on average;Baldwin collects its accounts receivable in 8 days on average.
B)Basinger writes off as uncollectible a greater percentage of its accounts receivable than does Baldwin Company.
C)Basinger collects its accounts receivable faster than does Baldwin Company.
D)Basinger makes on average 10 credit sales annually to each of its customers,while Baldwin makes 8 credit sales to each customer.

Question

Quizplus · Accepted Answer

The accounts receivable turnover rate measures how quickly a company collects its accounts receivables. A higher turnover rate indicates a company is collecting its receivables faster than a company with a lower turnover rate. Therefore, Basinger Company with a turnover rate of 10 collects its accounts receivable faster than Baldwin Corporation with a turnover rate of 8.

The Accounts Receivable Turnover Rate for Baldwin Corporation Is 8,and