Asked by virendra kumar on Jun 21, 2024
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A Company had net sales of $23,000,and its average account receivables were $5,700.Its accounts receivable turnover is 0.24.
Net Sales
The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods, and discounts.
Accounts Receivable Turnover
A financial ratio that measures how efficiently a company collects its receivables or the speed of debt collection from customers.
Average Account Receivables
The average amount of money owed to a company by its customers for goods or services delivered on credit.
- Understand the computation and importance of the accounts receivable turnover ratio.
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Learning Objectives
- Understand the computation and importance of the accounts receivable turnover ratio.
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