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      Question

      Read the following information to answer the below

      questions:  Net Sales = 40,00,000 (20 % GP Element) out of which 40% is on credit. Opening Inventories were 60 % of closing inventories. Opening Receivables are 120,000. Calculate the receivables turnover ratio of the company?
      A 6.92 times Correct Answer Incorrect Answer
      B 10.43 times Correct Answer Incorrect Answer
      C 17.39 times Correct Answer Incorrect Answer
      D 4.71 times Correct Answer Incorrect Answer

      Solution

      Credit sales/Average accounts receivables 16,00,000 / 2,30,000 =6.96 times Credit sales = 40,00,000(total sales) * 40% =16,00,000 Average accounts receivables = 1,20,000 (opening debtors) + 3,40,000 (Closing debtors) / 2 = 230,000

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