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Sales are $994,000. Accounts receivable was $91,000 at the start of the year and $108,000 at the end. What is the accounts receivable turnover (to one decimal)?
A9.2
B10.0
C11.0
D5.0
Answer & Solution
Correct answer: B. 10.0
1. Average AR = ($108,000 + $91,000) / 2 = $99,500.
2. AR turnover = sales / average AR = $994,000 / $99,500.
3. = 10.0.
4. Trap: 9.2 (option B) uses ending AR of $108,000 rather than the average.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §7.3.4 "Accounts Receivable Turnover", p.296_
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