14 - Which of the following is the formula to compute accounts receivable turnover? a) O The formula is net sales / average net accounts receivable. b) O The formula is cost of goods sold / average inventory c) The formula is net credit sales / average inventory.

14 - Which of the following is the formula to compute accounts receivable turnover? a) O The formula is net sales / average net accounts receivable. b) O The formula is cost of goods sold / average inventory c) The formula is net credit sales / average inventory.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 5MC

See similar textbooks

Related questions

Q: Pit Corporation owns 90% of Stop Company's outstanding common stock. On 07/01/20, Pit sold inventory…

A: Journal entry: A journal entry is used to record day-to-day transactions of the business by debiting…

Q: Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most…

A: Gross Purchase describes the amount of total purchase before deducting any discounts and rebates as…

Q: Answer the following: 1. How much is the net purchases? 2. How much is the "change in inventory" in…

A: Solution 1) Calculated the Net Purchase Net Purchase = Gross purchase + Freight in - Purchase…

Q: The following select information is taken from Blueberry Pie Corp.'s statements of financial…

A: Inventory Turnover Ratio: Cost of goods sold / Average Inventory COGS = 123000 Average Inventory…

Q: 16. Which of the following is a contra account? a. Sales discounts b. Purchase returns and…

A: In accounting, a contra account is a unique kind of account that is used to lower the balance of a…

Q: Options I have for denominator are - average accounts receivable, net average total assets cost…

A: The profit margin ratio can be calculated by dividing profit by net sales. It indicates the…

Q: What entry format is appropiate if sales returns and allowances occur on factored accounts? a.…

A: Journal is a place where accounting transactions are listed in the book keeping system before ledger…

Q: Gross profit is the difference between: Select one: a. revenues and expenses. b. net income and…

A: Gross profit is the company's profit after deducting the unit cost of goods from sales. Gross profit…

Q: Compute the following ratios: i. Accounts Receivable Turnover ratio; ii. Accounts Payable…

A: Here we have to calculate and determine the different mentioned financial ratios.

Q: Cutting Edge Co. is engaged in a small export business. The company maintains limited records. Most…

A: Total sales include cash sales and credit sales, while net sales can be calculated after deducting…

Q: The inventory turnover ratio compares: A. current assets to inventory. B. cost of goods sold to…

A: INVENTORY TURNOVER RATIOInventory Turnover Ratio indicates whether the investment in inventory is…

Q: Gross profit is calculated as the difference between net sales revenue and ________. A.…

A: Revenue- Revenue refers to the quantity of cash that a corporation actually received during the…

Q: 8- Which of the following is the formula to compute inventory turnover? 50% a) The formula is cost…

A: Inventory turnover ratio is a efficiency ratio which measures how efficiently inventory is managed.…

Q: Dividing net sales on account by the average amount of net accounts receivable is the calculation…

A: Formula: Net sales = Sales - sales returns Deduction of sales returns from the sales derives the net…

Q: 6) Which of the following are the normal baiances of Sales, Sales discounts, and Sales returms and…

A: Introduction: Accounting: Accounting is an art of recording , classifying and summarising and…

Q: . The operating cycle is equal to which one of the following? A. Inventory period plus the…

A: Operating cycle is computed as follows: Cash operating cycle is computed as follows: Cash…

Q: Dividing cost of goods sold by the average of merchandise inventory is the calculation for the…

A: The ratio indicates how fast the company selling its inventory. a high inventory turnover indicates…

Q: Which of the statements below is TRUE? a. Receivables turnover is accounts receivable divided by…

A: All turnover ratios are calculated over sales. The numerator will the sales or cost of goods sold…

Q: Please Calculate and interpret the following ratios Activity: Inventory Turnover , Receivables…

A: Ratio analysis refer to the evaluation of financial ration in order to get idea about profitability,…

Q: The difference between Net sales and Cost of goods sold is referred as _____________.

A: Net Sales means Sales revenue less any sales return, discount and allowances whereas cost of Goods…

Q: Calculate 1. Return on equity 2. Inventory Turnover 3. Accounts Receivable Turnover

A: Ratio analysis refers to the use of different financial items from the financial statement to…

Q: 11 - Which of the following is the formula to compute inventory turnover? a) The formula is cost of…

A: The inventory turnover ratio measures how efficiently inventory is managed in the organization…

Q: January 1, 2010, Ace Hardware received from Do-It-Yourself Shop 300 pieces nicrowave ovens. Ace…

A: Consignment : It is the way of business to sell the goods, in this process goods send by the owner…

Q: Two bases for estimating uncollectible accounts are: Select one: O A percentage of recelvables and…

A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…

Q: Compute the receivable turnover ratio Also compute the inventory turnover ratio

A: A quantitative method that provides information about the company including its liquidity,…

Q: The following balances have been excerpted from Chlorine's Statement of Financial Position for the…

A: Gross sales in accounting refers to the total amount of revenue generated by a business before any…

Q: Which of the following is a solvency ratio? a. Times interest earned. b. Inventory turnover ratio.…

A: The correct option is (A) Times Interest Earned Explanation: This ratio is the measure of a…

Q: When determining gross profit, only the following items must be taken into consideration: A.…

A: Gross Profit is the revenue earned by the company after subtracting the cost associated with earning…

Q: How to calculate the account receivable turnover ratio in a balance Sheet and income statement…

A: The records owed turnover proportion, otherwise referred to as the borrower's turnover proportion,…

Q: Percy Company is engaged in a small export business. The company maintains limited records. Most of…

A: 1. Total gross sales on account - Gross sales on accounts is the sales which is made on account for…

Q: 10. Choose the options to correctly complete the following statement. Some balance sheet and income…

A: Sales refer to the total amount of revenue generated by a business through the sale of goods or…

Q: Questions: 1. Accounts receivable turnover (assume all sales are on account) 2. Average collection…

A: Average accounts receivable= (Opening accounts receivable + Closing accounts receivable)/2…

Q: ollowing calculations of receivable turnover is correct? A. Number of days in the year divided by…

A: Solution: Receivable turnover represent the effectiveness of company's ability to collects its…

Question

100%

14 - Which of the following is the formula to compute accounts receivable turnover?
a)
The formula is net sales / average net accounts receivable.
b) O
The formula is cost of goods sold / average inventory
The formula is net credit sales / average inventory.
d) O
The formula is average net accounts receivable / one day's sales.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Which of the following calculations of receivable turnover is correct? A. Number of days in the year divided by receivable turnover. B. Net sale on account divided by average receivables. C. Cost of goods sold divided by average inventory. D. Net income divided by net sales.
11 - Which of the following is the formula to compute inventory turnover? a) The formula is cost of goods sold / average inventory b) The formula is average net accounts receivable / one day's sales. c) The formula is net credit sales / average inventory. d) O The formula is net credit sales / average net accounts receivable.
27. The average payment period of an organization is calculated by __________. a. Average payables / Daily credit purchases b. Average payables / Net purchases c. Accounts payables / Total purchases d. Opening account payable + Closing account payable /2
Dividing net sales on account by the average amount of net accounts receivable is the calculation for the a.merchandise inventory turnover. b.working capital turnover. c.plant and equipment turnover. d.accounts receivable turnover.
8- Which of the following is the formula to compute inventory turnover? a) The formula is cost of goods sold / average inventory b) O The formula is net credit sales / average inventory. The formula is average net accounts receivable / one day's sales. d) The formula is net credit sales / average net accounts receivable.
Two bases for estimating uncollectible accounts are: Select one: O A percentage of recelvables and percentage of sales. O B. percentage of current assets and percentage of sales. O C. percentage of recelvables and percentage of total revenue. O D. percentage of assets and percentage of sales.
The numerator in calculating the accounts receivable turnover is a. average accounts receivable b. accounts receivable at year-end c. sales d. total assets
Which of the following mathematical equations is used to compute the payables deferral period (DPO)? 000 о Payables deferral period (DPO) = Accounts payable/Daily credit purchases Payables deferral period (DPO) = Cost of goods sold/Accounts payables Payables deferral period (DPO) = Daily credit purchases/Accounts payable Payables deferral period (DPO) = Payables turnover 360 Payables deferral period (DPO) = Payables turnover/360
Based on the following data, what is the accounts receivable turnover? Sales on account during year Cost of goods sold during year Accounts receivable, beginning of year Accounts receivable, end of year Inventory, beginning of year Inventory, end of year Oa. 11.7 Ob. 5.4 Oc. 2.7 C. Od. 11.9 $590,953 217,271 49,800 50,913 88,221 108,726
What entry format is appropiate if sales returns and allowances occur on factored accounts? a. Sales returns and allowances xx Receivable from factor xx b. Reveivable from Factor xx Factoring expense xx c. Sales returns and allowances xx Factoring expense xx d. Reveivable from factor xx Accounts receivable xx
Which of the statements below is TRUE? a. Receivables turnover is accounts receivable divided by sales. b. Inventory turnover is cost of goods sold divided by accounts receivables. c. Total asset turnover is profits divided by total assets. d. A higher inventory turnover ratio signifies that inventory is moving faster.
26. Given the following financial data for Alpha Company, calculate the ratios listed below the data. (Compute all ratios and percents to 2 decimal points.) Sales (all on credit) Cost of Goods Sold $650,000 422,500 Income before 78,000 Income Taxes Net Income 54,600 Ending Beginning Balances Balances Cash $19,500 $15,000 Accounts Receivable 65,000 59,800 (net) Merchandise 71,500 66,300 Inventory Plant and Equipment (net) 195,000 183,900 Total Assets $351,000 $325,000 Current $74,100 $100,200 Liabilities Long-Term Notes Payable 97,500 100,000 Stockholders' 179,400 124,800 Equity Total Liabilities and Stockholders' $351,000 $325,000 Equity