Question

The account receivable turnover measures:

a. How long it takes to sell accounts receivable to a factor.

b. How often, on average, receivables are received and collected during the period.

c. All of the options are correct.

d. How long it takes to sell merchandise inventory.

e. The relation of cash sales to credit sales.

Answer 1

The answer is B.

Step-by-step explanation:

Accounts receivable turnover is the number of times per period(quarterly, semiannuallly or yearly) that a business

or firm collectss its average accounts receivable. The ratio is used to evaluate the firm's ability to efficiently sell on credit and collect money from its customers in a timely manner.

A lower number of turnover depicts higher efficiency.

Therefore, the correct answer is B. It measures how frequent, on average, receivables are received and collected during the period