New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    ABC Ltd’s purchases during the year were Rs 200000.

    The balance sheet shows an average accounts payable balance of Rs 15000. ABC’s payables period approximately equals to:
    A 37 days Correct Answer Incorrect Answer
    B 28 days Correct Answer Incorrect Answer
    C 44 days Correct Answer Incorrect Answer
    D 13 days Correct Answer Incorrect Answer
    E 23 days Correct Answer Incorrect Answer

    Solution

    Purchases Turnover Ratio = Purchases/ Average Payables i.e: 200000/15000 = 13.33 Payables Payment Period = Number of days in a year/ Purchases Turnover Ratio 365/13.33 = 27.38 ~ 28

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