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Guttery Corporation has provided the following financial data from its balance sheet:
Sales on account in Year 2 totaled $1,450,000 and cost of goods sold totaled $900,000.
-The company's accounts receivable turnover for Year 2 is closest to:
Accrual Basis
An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.
Revenue Recognition
Revenue recognition is the accounting principle governing when revenue is considered earned and can be recorded.
Expense Recognition Principle
An accounting principle that expenses should be recognized and recorded at the time they are incurred, not necessarily when cash is paid.
Recognition Principle
An accounting concept dictating that revenue should be recognized in the income statement when it is realized or realizable and earned, not necessarily when cash is received.
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