The Accounts Receivable Turnover Is Computed by Dividing

question 192

Multiple Choice

The accounts receivable turnover is computed by dividing

• A)total sales by average receivables.
• B)total sales by ending receivables.
• C)net credit sales by average receivables.
• D)net credit sales by ending receivables.

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Definitions:

Accumulated Depreciation

The total amount of depreciation that has been recorded up to a specific point in time, reflecting the wear and tear on tangible assets over their useful lives.

Noncontrolling Interest

The portion of equity (ownership) interest in a subsidiary not held by the parent company, represented in the consolidated financial statements of the parent company.

Equity Method

An accounting technique used by companies to assess the profits earned by their investments in other companies, where they hold significant influence but not full control.

Excess Amortizations

Amortization expenses that exceed the norm or expectation for a particular asset, typically resulting from an aggressive estimation of the asset's useful life or value.