Question

The accounts receivable turnover measures a.the number of days of accounts receivable outstanding b.the fair market value of accounts receivable c.the efficiency of the accounts payable function d.how frequently during the year the accounts receivable are converted to cash

Answer 1

Answer:

d.how frequently during the year the accounts receivable are converted to cash

Explanation:

The formula to compute the account receivable turnover is shown below:

Account receivable turnover ratio = Net credit sales ÷ Average accounts receivable  

where,  

The Average accounts receivable would be  

= (Accounts receivable, beginning of year + Accounts receivable, end of year) ÷ 2

This ratio derives that how much frequently is there for converting the account receivable to cash

hence, the correct option is d.