Question

Trade payables turnover ratio = ___

• A. $\frac{\text{Net Credit Purchase}}{\text{Average accounts payable}}$
• B. $\frac{\text{Net Credit Purchase}}{\text{Average accounts receivable}}$
• C. $\frac{\text{Net credit Revenue from Operations}}{\text{Average Trade payable}}$
• D. None of these

Answer 1

The correct option is A

$\frac{\text{Net Credit Purchase}}{\text{Average accounts payable}}$

$\text{Trade payables turnover ratio}=\frac{\text{Net Credit Purchases}}{\text{Average trade payables}}$