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    Question

    From the following details, calculate the accounts

    receivable turnover ratio:  Sales 400,000 Cost of the Goods sold 100,000  Account Receivable (at the beginning of the year) Rs.60,000 Account Receivable (at the end of the year) Rs.100,000
    A 4 Correct Answer Incorrect Answer
    B 5 Correct Answer Incorrect Answer
    C 6.67 Correct Answer Incorrect Answer
    D 2 Correct Answer Incorrect Answer
    E Cannot be determined Correct Answer Incorrect Answer

    Solution

    Accounts receivable turnover ratio = Net Sales/ Average Account Receivables  Average Receivables = (60,000+100,000)/2=80,000 Accounts receivable turnover ratio = 400,000/80,000 = 5

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