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    Question

    Net Sales = 40,00,000 (20 % GP Element) out of which 40%

    is on credit. Opening Receivables & closing receivables are 120,000 & 3,40,000 respectively. 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
    E 8.62 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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