A firm has the balance sheet accounts, Common Stock and Paid-in Capital in Excess of Par, with values of $40,000 and $500,000, r
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Answer:
Accounts Receivables Turnover Ratio = = 10 times.
Explanation:
Accounts Receivables Turnover ratio =
Here Net Credit Sales = $6.5 million
Accounts Receivables Opening Balance = $600,000
Accounts Receivables Closing Balance = $700,000
Average Accounts Receivable Balance =
Accounts Receivables Turnover Ratio = = 10 times.
This shows that accounts receivables are on an average 1/10th of credit sales.
Final Answer
Accounts Receivables Turnover Ratio = = 10 times.