The Following Balance Sheet Information Was Provided by O'Connor Company

question 53

Multiple Choice

The following balance sheet information was provided by O'Connor Company:
$\begin{array}{lrr}\text { Assets } & \text { Year 2 } & \text { Year 1 } \\\text { Cash } & \$ 4,000 & \$ 2,000 \\\text { Accounts receivable } & 15,000 & 12,000 \\\text { Inventory } & \$ 35,000 & \$ 38,000\end{array}$
Assuming that net credit sales for Year 2 totaled $270,000,what is the company's most recent accounts receivable turnover?

• A) 18 times
• B) 20 times
• C) 22.5 times
• D) 7.7 times

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Definitions:

Effective Interest Rate

The actual return on an investment or the actual cost of a loan, taking into account the effect of compounding interest.

Stated Interest Rate

The interest rate declared on a bond or loan agreement, not necessarily reflecting the market interest rate or effective interest rate.

Present Value

The current worth of a future sum of money or stream of cash flows, discounted at a specific rate.

Actuarial Information

Data and calculations used by actuaries to assess risks and determine premiums or forecasts for insurance and other industries.