Question

Oriole Company had a balance in the Accounts Receivable account of $778000 at the beginning of...

Oriole Company had a balance in the Accounts Receivable account of $778000 at the beginning of the year and a balance of $852000 at the end of the year. Net credit sales during the year amounted to $4075000. The accounts receivable turnover was

A_

5.0 times.

B_

4.8 times.

C_

5.2 times.

D_

2.5 times.
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Answer #1

The correct answer is A) 5.0 times.

Supporting explanations:

Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable

Average Accounts Receivable = (Beginning balance of Accounts Receivable + Ending balance of Accounts Receivable) / 2

= ($778,000 + $852,0000 / 2

= $815,000

Accounts Receivable Turnover Ratio = $4,075,000 / $815,000

= 5.0 times

Therefore, accounts receivable turnover ratio is 5.0 times, hence, the correct answer is A) 5.0 times.

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