Question

Bria Clothing Store had a balance in the Accounts Receivable account of $920,000 at the beginning of the year and a balance of $980,000 at the end of the year. Net credit sales during the year amounted to $7,600,000. The receivables turnover ratio was

Answer 1

Answer:

8.0 times

Explanation:

Accounts receivable turnover = Net credit sales / Average accounts receivables

Net credit sales = $7,600,000

Average accounts receivables = Beginning account receivable + Ending account receivable / 2

= ($920,000 + $980,000)/2

= $950,000

Therefore,

Account receivable turnover = $7,600,000 / $950,000

= 8.0 times