SSS Ltd Has Provided the Following Information from Its Financial

question 18

Multiple Choice

SSS Ltd has provided the following information from its financial statements for the year ended 30 June 2018. $\begin{array}{ll}\text { Sales (all on credit) } & \$ 2,000,000 \\\text { Gross profit on sales } & 1,000,000 \\\text { Net profit } & 150,000 \\\text { Cost of sales } & 1,000,000 \\\text { Inventory at end of year } & 200,000 \\\text { Accounts receivable at end of year } & 500,000\end{array}$
-The company trades 365 days per year. The number of times SSS's accounts receivable turned over for 2018 is:

• A)5.0 times.
• B)1.8 times.
• C)3.8 times.
• D)4.0 times.

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Definitions:

Securitization Entity

A structured finance process that involves pooling various financial assets to create new securities, which are then sold to investors.

Legally Distinct

Refers to entities or organizations that are recognized as separate legal entities under the law, each with its own legal rights and obligations.

Factor With Recourse

An arrangement where a business sells its receivables to a factor but remains liable if the debts sold are not collected.

Recourse Obligation

Recourse obligation refers to a debt or liability for which the borrower is personally responsible, meaning the lender can pursue the borrower's other assets if the primary assets securing the loan fail to satisfy the debt.