1. CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO1
Compute the beginning and ending book value.
CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO
Total Accounts
Receivable
Allowance for
Uncollectible
Accounts
Book Value
of Accounts – =
Beginning
$50,329.14
$1,416.83
$48,912.31 – =
Ending
$45,462.79
$1,363.88
$44,098.91 – =
Lesson 7-3, page 206

2. CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO2
Compute the average book value.
CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO
Beginning Book
Value of
Accounts
Receivable
Ending Book
Average Book + =
 2
($48,912.31
$44,098.91)
$46,505.61 + =
 2
Lesson 7-3, page 206

3. CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO3
Compute the accounts receivable turnover.
CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO
Net Sales
on Account
Average Book
Value of
Accounts Receivable
Accounts
Receivable
Turnover Ratio  =
$330,312.85
$46,505.61
7.1 times  =
Lesson 7-3, page 206

4. CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO4
Compute the average number of days for payment.
CALCULATING THE ACCOUNTS RECEIVABLE TURNOVER RATIO
Days in
Year
Accounts Receivable
Turnover Ratio
Average
Number of Days
for Payment  =
365
7.1 51  =
Lesson 7-3, page 206

5. TERMS REVIEW accounts receivable turnover ratio
book value of accounts receivable
Lesson 7-3, page 208