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:

Amortized Cost Basis

A financial calculation method that gradually writes off the initial cost of an asset over time.

Comprehensive Income

An all-encompassing measure of income that includes all changes in equity during a period except those resulting from investments by and distributions to shareholders.

Credit Loss

A reduction in the projected future cash flows from a loan or other financial instrument due to the borrower's inability to make payments as agreed.

Fair Value

An accounting term referring to the estimated worth of an asset or liability based on current market conditions.