![]() ![]() In other words, Company X collected its average accounts receivables five times during the one-year period. So, with net credit sales of $2,000,000 and average accounts receivable of $400,000, Company X’s receivables turnover ratio was 5.0. The company had an opening accounts receivable balance of $420,000 and a closing balance of $380,000, giving an average accounts receivable of $400,000. With sales discounts of $100,000, sales returns of $125,000, and sales allowances of $75,000, its net credit sales were $2 million.
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