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Question
| ₹ | ₹ | |
| Opening Debtors | 60,000 | |
| Closing Debtors | 1,00,000 | 80,000 |
| Less: Provision for Doubtful Debts | 20,000 | |
| Total Sales | 8,40,000 | |
| Credit Sales | 5,60,000 |
Trade Receivables Turnover Ratio will be:
Options
12 Times
8 Times
10.5 Times
7 Times
MCQ
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Solution
7 Times
Explanation:
Trade Receivables Turnover Ratio = `"Credit Revenue from Operations"/"Average Trade Receivables"`
Average Trade Receivables = `("Opening Debtors + Closing Debtors")/2`
= `(60,000 + 1,00,000)/2`
= `(1,60,000)/2`
= ₹ 80,000
Trade Receivables Turnover Ratio = `(5,60,000)/(80,000)`
= 7 Times
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