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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

LO4 Accounts receivable turnover is the number of times merchandise inventory turned over or was sold during the accounting period.

To determine

Identify whether the given statement is true or false.

Explanation

Accounts receivable turnover:

Accounts receivable turnover is a liquidity measure of accounts receivable in times, which is computed by dividing “the net credit sales by the average amount of net accounts receivables”.

It indicates the number of times the average amount of net accounts receivables collected during a particular period.

Formula to compute accounts receivables turnover ratio is as follows:

Accountsreceivableturnoverratio

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