Comments This is an opportunity to work with Accounts Receivable Turnover and, for future reference, Days in Receivables. Accounts receivable Turnover = Net Credit Sales / Average Accounts receivable Days Accounts receivable outstanding = Days in receivables =365/ Accounts Receivable Turnover As with our discussion of inventory, the financial statements are an aggregation across all types of customers that have varying credit terms. Some customers are cash, some have short credit terms, some have more generous credit terms. If the problem separates out cash sales from credit sales, it's probably more informative to use only the credit sales in the turnover measure. Nevertheless, always go with the information given. If the problem does not separate the sales into credit and cash, then include all of the sales as credit. In a sense, the resulting average will be a little low because the cash sales are instant collections. Problem statement 3 ining receivable er (LO 6-3) Utica Company's net accounts receivable was $250,000 at December 31, 20X0, and $300,000 at December 31, 20XI. Net cash sales for 20XI were $100,000. The accounts receivable turnover for 20XI was 5.0 , which was computed from net credit sales for the year. Required 1. Find the Accounts Receivable Turnover. 2. Find the Days in Receivables