Question

Beverage International reports net credit sales for the year of $468,000. The company's accounts receivable balance at the beginning of the year equaled $24,000 and the balance at the end of the year equaled $34,000. What is Beverage International's receivables turnover ratio?

Answer 1

Answer:

The Beverage International's receivables turnover ratio is =  16,14  

Explanation:

The accounting receivable turnover formula is :

Net credit sales / Average Accounts Receivable

So  Net credit sales = $468,000

And Average Accounts Receivable = ($24,000 + $34,000)/2 =  $29.000,00  

The receivables turnover ratio is =  $468,000 / $29.000,00  =  16,14