The Formula to Compute Accounts Receivable Turnover Is

question 43

Multiple Choice

The formula to compute accounts receivable turnover is

• A)net credit sales/average net accounts receivable.
• B)net credit sales/average inventory.
• C)cost of goods sold/average inventory.
• D)average net accounts receivable/one day's sales.

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Definitions:

Net Investment

The total amount of investment in new capital assets minus the depreciation on existing assets, indicating growth in an economy's productive capacity.

Inventory Investment

The change in the stock of goods held by a business for resale or production over a period, part of the investment component in GDP calculation.

Depreciation

The method of spreading out the expense of a physical asset over its lifespan.

Capital Stock

The total amount of physical goods or financial assets that a company or country uses in producing goods or services.