The Formula for the Receivables Turnover Ratio Is

question 46

Multiple Choice

The formula for the receivables turnover ratio is:

• A)Average accounts receivable divided by average total assets.
• B)Net credit sales divided by average accounts receivable.
• C)Net credit sales divided by average total assets.

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value of the asset.

Amortization Expense

The gradual charging to expense of an intangible asset's cost over its useful life.

Flood Loss

Financial damage incurred due to flooding, which can affect individuals, businesses, and properties, often requiring specific insurance coverage.

Unusual Loss

Losses that are uncommon in occurrence and not expected to recur in the foreseeable future, significantly impacting financial statements.