Question

At the beginning of 2009, Vici Ventures had accounts receivable of $220,000. At the end of 2009, the company had accounts receivable of $340,000. During 2009, Vici had total sales of $1,000,000, 70% of which were credit sales. What was Vici's receivables turnover ratio for 2009?

a. 2.50
b. 3.57
c. 2.94
d. 146 days
e. 102 days

Answer 1

Option A; 2.5

Step-by-step explanation:

Average Accounts Receivable =

Accounts Receivable(Opening) + Accounts Receivable (Closing

2

$220,000+$340,000

2

$280,000

Vici's Receivables Turnover Ratio 2009= Credit Sales

Average Accounts Receivables

Credit Sales= $1000,000×70%=$700,000

Accounts Receivables Turnover Ratio= 700,000

280,000

A. 2.5