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28 December, 01:15

Last year, Ace Electronics had credit sales of $1,500,000. The average accounts receivable balance last year was $250,000. What was the receivables turnover ratio for Ace Electronics last year?

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  1. 28 December, 01:27
    0
    6 times

    Explanation:

    The formula and the computation of the receivables turnover ratio is shown below:

    Account receivable turnover ratio = (Credit sales) : (Average accounts receivable balance)

    = ($1,500,000) : ($250,000)

    = 6 times

    We simply divided the credit sales by the average account receivable balance so that the receivables turnover ratio could arrive
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