Powers Company Reported Net Sales of $1,200,000 and Average Accounts

question 194

Multiple Choice

Powers Company reported Net Sales of $1,200,000 and average Accounts Receivable, net of $78,500. The accounts receivable turnover ratio is:

• A)0.65 times
• B)14.3 times
• C)28.6 times
• D)15.3 times
• E)16.3 times

---

Definitions:

Net Sales

The total revenue from goods or services sold by a company, after deducting returns, allowances for damaged or missing goods, and discounts.

Cost of Goods Sold

The direct costs attributable to the production of the products sold by a company, including material and labor costs.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs.

Operating Cycle

The duration of time it takes for a business to turn its inventory into cash through sales.