A Company Has a Receivables Turnover Ratio of 10

question 107

Multiple Choice

A company has a receivables turnover ratio of 10. The average gross receivables during the period are $400,000. What is the amount of net credit sales for the period?

• A) $40,000
• B) $4,000,000
• C) $480,000
• D) Cannot be determined from the information given

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Definitions:

Allocating Resources

The process of distributing available resources among various competing needs or projects in an efficient manner.

Invisible Hand

Adam Smith's metaphor describing the self-regulating nature of the marketplace that guides individuals to unintentionally benefit society through personal gain.

Principal-Agent Problem

A dilemma in relationships where one party (the agent) is supposed to act in the best interest of another (the principal) but may have an incentive to act in their own self-interest instead.

Political Corruption

The misuse of public power or position for personal gain, undermining the integrity and fairness of political processes.