USCPA2014考试真题-BEC-9

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2014 AICPA Newly Released Questions – Business

9. CPA-08349

Mein Co.'s sales totaled $300,000 for the current year. Mein's cost of goods sold was $150,000. Mein's accounts receivable balance was $20,000 on January 1 and $30,000 on December 31. What was Mein's accounts receivable turnover rate for the current year?

a. 6 times.

b. 10 times.

c. 12 times.

d. 15 times.

AICPA Difficulty Rating: MEDIUM

Question Title: AICPA Newly Released 2014

Lecture to be assigned to: B3

Topic to be assigned to: 2

Page reference (page # and outline point): pg. 42, II, D, 2, b.

ANSWER:

Choice "c" is correct. Accounts receivable turnover is calculated as follows:

In this question, sales are $300,000, and receivables change from $20,000 on January 1 to $30,000 on December 31. For balance sheet items used in a ratio, the average number is used in order to make it comparable to the income statement item (which reflects the entire year).

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The numbers are applied as shown below:

Choice "a" is incorrect. This answer uses cost of goods sold in the numerator instead of sales. Choice "b" is incorrect. This answer choice uses only the ending (December 31) accounts receivable balance instead of the average balance.

Choice "d" is incorrect. This answer choice uses only the beginning (January 1) accounts receivable balance instead of the average balance.