A Company Has an Accounts Receivable Turnover of 10

question 48

Multiple Choice

A company has an accounts receivable turnover of 10. The average net accounts receivable during the period are $900,000. What is the amount of net credit sales for the period?

• A) $90,000
• B) $9,000,000
• C) $900,000
• D) $990,000

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Definitions:

Elastic

Describes a situation in which the quantity demanded or supplied of a good or service changes significantly as its price changes.

Inelastic

A characteristic of goods whereby a change in price leads to a relatively smaller change in the quantity demanded or supplied.

Total-revenue Test

A method used to determine the price elasticity of demand by observing changes in total revenue as a result of price alterations.