Question

(A) Compute Trade Receivables Turnover Ratio from the following: Gross Revenue from operation Rs. 9,00,000 Trade Receivables at the beginning of year Rs. 83,000 Trade Receivables at the end of yearRs. 1,17,000 Revenue from Operations ReturnRs. 1,00,000 ​

Answer 1

Answer:

Average Debtors = `("Opening Debtors + Closing Debtors")/2`

In 2017 = `(83000 + 117000)/2 ` = Rs 100000

In 2018 = `(117000 + 83000)/2` = Rs 100000

Debtors Turnover Ratio = `"Net Sales"/"Average Debtors"`

In 2017 = `800000/100000` = 8 times

In 2018 = `700000/100000` = 7 times

Explanation:

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