Efficiency ratio: If Randolph Corp. has accounts receivables of $654,803 and net sales of $1,932,349, what is its accounts receivable turnover?

Question

Quizplus · Accepted Answer

Accounts receivable turnover = Net Sales / Average Accounts Receivable
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2
Assuming we don't have the beginning or ending accounts receivable, we can use the given accounts receivable ($654,803) as the approximation for the average accounts receivable.
Accounts receivable turnover = $1,932,349 / $654,803 = 2.95 times. Therefore, the best choice is C.

Efficiency Ratio: If Randolph Corp