Maloney Company Had Net Credit Sales During the Year of ₤1,800,000

question 123

Multiple Choice

Maloney Company had net credit sales during the year of ₤1,800,000 and cost of goods sold of ₤1,200,000. The balance in accounts receivable at the beginning of the year was ₤120,000, and the end of the year it was ₤180,000. What was the accounts receivable turnover ratio?

• A) 7.5
• B) 10.0
• C) 12.0
• D) 15.0

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Definitions:

Accounting Equation

The fundamental principle of accounting that states that Assets = Liabilities + Equity, providing the basis for double-entry bookkeeping.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, also known as shareholder's equity.

Assets

Resources owned by a business which are expected to provide future economic benefits.

Landlord

An owner of property, such as land or buildings, who leases or rents it to another party, known as a tenant.