Question
A company records Net Sales of ₹60,00,000, of which
50% are on credit. The opening receivables were ₹2,00,000 and the closing receivables were ₹4,00,000. Calculate the Receivables Turnover Ratio.Solution
The formula is: Receivables Turnover Ratio=Average Receivables/Credit Sales • Credit Sales = ₹60,00,000 × 50% = ₹30,00,000 • Average Receivables = (₹2,00,000 + ₹4,00,000) ÷ 2 = ₹3,00,000 Now, Receivables Turnover Ratio=30,00,0003,00,000=8.00 timesReceivables Turnover Ratio=3,00,00030,00,000 =8.00times Thus, the company’s Receivables Turnover Ratio = 8.00 times.
Read the following information to answer the below questions:
A company reported a net profit of ₹10 lakh. During the year, depreciation was ₹4 lakh, accounts receivable increased by ₹2 lakh, inventory decrea...
ICDS IV primarily deals with which aspect of financial reporting.
Which of the following statements is true for cash basis accounting?
…………… is the % by how much % can the sales drop down before the organisation start making losses
ABC Ltd. incurs direct material cost ₹8,00,000, direct labour ₹5,00,000, and factory overheads 60% of direct labour. Administration overheads are �...
XYZ Ltd. incurred R&D expenses of ₹20 lakhs for developing a new product. The product has not yet reached the commercialisation stage. How should the ...
Which is a non-discounting capital budgeting technique?
A cheque is received from a creditor and paid into the bank on the same day. How will this transaction be recorded in the cashbook?
Average Inventory = ₹12,000. Closing Inventory is ₹3,000 more than Opening Inventory. The value of Closing Inventory is _____.
Relevant for Exams:
