A company has net sales of $1,246,200 and average accounts receivable, net of $402,000. Its accounts receivable turnover for the period will be calculated in the following way =
Accounts Receivable Turnover = Net Sales/Average Accounts Receivable Accounts Receivable Turnover
$1,246,200/$402,000 = 3.10
What is accounts receivable turnover ?
The debtor's turnover ratio, sometimes referred to as the accounts receivable turnover ratio, is an efficiency ratio that assesses how effectively a business uses its assets and, consequently, how effectively it collects revenue.
The average number of times a company collects its accounts receivable during a specific time period is measured by the accounts receivable turnover ratio.
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