Determine Debtors turnover ratio if a firm has made credit sales of Rs. 210000/- during
the year. The outstanding amount of Debt at the begging and end was Rs. 27500/- and
32500/- respectively.
4 times
B.
6 times
c.
351
7 times
D.
5 times
Answers
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1
Answer:
Average debtors = (Rs. 40,000 + Rs. 1,20,000)/2 = Rs. 80,000
Cash sales = 20% of total sales
= Rs. 4,00,000 x 20%
= Rs. 80,000
Net credit sales = Total sales - Cash sales
= Rs. 4,00,000 - Rs. 80,000
= Rs. 3,20,000
Debtors turnover ratio = Net credit sales/Average debtors
= Rs. 3,20,000/Rs. 80,000
= 4 Times
Explanation:
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