question 4 (5 points) if a company has 90 - day credit terms, its expected accounts receivable turnover is…

question 4 (5 points) if a company has 90 - day credit terms, its expected accounts receivable turnover is a) 12. b) 4. c) 2. d) 1.

question 4 (5 points) if a company has 90 - day credit terms, its expected accounts receivable turnover is a) 12. b) 4. c) 2. d) 1.

Answer

Explanation:

Step1: Recall accounts receivable turnover formula

Accounts - receivable turnover = $\frac{360}{\text{Average collection period}}$

Step2: Identify average collection period

The company has 90 - day credit terms, so the average collection period is 90 days.

Step3: Calculate accounts receivable turnover

Accounts - receivable turnover = $\frac{360}{90}=4$

Answer:

B. 4