Trade receivables turnover ratio defined as the ratio to the average trade receivables.

credit purchases

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total turnover

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purchases

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net credit sales

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Solution

The correct option is D net credit sales
Trade receivables turnover ratio defined as the ratio of net credit sales to the average trade receivables. It indicates the efficiency in collection of amount due from debtors.

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Similar questions

Q. Calculate Gross Profit Ratio from the following data:
Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales.

Q. From the information given below, calculate Trade Receivables Turnover Ratio:
Credit Revenue from Operations, i.e., Credit Sales ₹8,00,000; Opening Trade Receivables ₹1,20,000; and Closing Trade Receivables ₹2,00,000.
State giving reason, which of the following would increase, decrease or not change Trade Receivables Turnover Ratio:
(i) Collection from Trade Receivables ₹40,000.
(ii) Credit Revenue from Operations, i.e., Credit Sales ₹80,000.
(iii) Sales Return ₹20,000.
(iv) Credit Purchase ₹1,60,000.

Q. Closing Trade Receivables ₹ 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 40,000; Revenue from Operations, i.e., Net Sales ₹ 6,00,000. Calculate Trade Receivables Turnover Ratio.

Q. Trade payables turnover ratio is the ratio of net credit purchases to the average .

Closing Trade Receivables ₹ 4,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2,00,000; Revenue from Operations, i.e., Revenue from Operations, i.e., Net Sales ₹ 15,00,000. Calculate Trade Receivables Turnover Ratio

[Hint: 1. Net Credit Sales = Total Sales − Cash Sales

2. Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]

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Trade receivables turnover ratio defined as the ratio to the average trade receivables.

The correct option is D net credit salesTrade receivables turnover ratio defined as the ratio of net credit sales to the average trade receivables. It indicates the efficiency in collection of amount due from debtors.

The correct option is D net credit sales
Trade receivables turnover ratio defined as the ratio of net credit sales to the average trade receivables. It indicates the efficiency in collection of amount due from debtors.