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8)What does the Accounts Receivable Turnover measure? Group of answer choices a)The net realizable value of...

8)What does the Accounts Receivable Turnover measure?

Group of answer choices

a)The net realizable value of Accounts Receivable

b)The dollar amount of funds tied up in Accounts Receivable

c)How quickly a company collects Accounts Receivable

d)The average days for cash collection.

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Homework Answers

Answer #1

Answer: Option C) How Quickly a Company collects account receivables

Explanation:

The accounts receivable turnover ratio, also known as the debtor’s turnover ratio, is an efficiency ratio that measures how efficiently a company is collecting revenue – and how efficiently it is using its assets. The accounts receivable turnover ratio measures the number of times over a given period that a company collects its average accounts receivable.

Account receivable Turn over is measured by following formula:

Account REceivable Turnover = Net Credit Sales / Average Account receivables

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