The Accounts Receivable Turnover Is Computed by Dividing Total Sales

question 172

True/False

The accounts receivable turnover is computed by dividing total sales by the average net receivables during the year.

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Definitions:

Historical Cost Principle

An accounting principle that states assets should be recorded and reported at their original purchase cost.

Brokerage Fees

Charges levied by brokers for facilitating transactions between buyers and sellers in the financial markets.

Investment

The allocation of resources, typically money, into assets or projects with the expectation of generating income or profit.

Investment Income

Earnings from assets acquired, such as dividends on shares or interest on bonds.