Answer (D) is correct . The accounts receivable turnover is computed by dividing the net credit sales by average accounts receivable. The average is $37,500 [($45,000 +
Answer (A) is incorrect because The number 4.9 can be obtained only by using year-end receivables in the denominator and cost of goods sold in the numerator.
Answer (B) is incorrect because Cost of goods sold divided by average receivables equals 5.9.
Answer (C) is incorrect because The number 6.7 is based on the ending receivables.
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Assume net credit sales and cost of goods sold for Year 2 were $300,000 and $220,000, respectively. Lisa, Inc.’s accounts receivable turnover for Year 2 was
