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Question 46 Chapter 14 of Class 12 Part – 2 – 2024
Trade Receivable Turnover Ratio
46. (Trade Receivable T/O Ratio/Average Trade Receivable) A business firm made credit sales of (Revenue from Operation) ₹ 4,20,000 during the financial year. If the collection period is 60 days and the year is assumed to be of 360 days. Calculate (i) Trade receivable turnover ratio (ii) Average Debtors.
| Trade Receivable Turnover Ratio | = | Number of days |
| Average Collection Period | ||
| Trade Receivable Turnover Ratio | = | 360 |
| 60 | ||
| = | 6 times |
| Average collection period | = | Net Credit Sales |
| Average Trade Receivable | ||
| = | ₹ 4,20,000 | |
| Average Trade Receivable | ||
| Average Trade Receivable | = | ₹ 4,20,000 |
| 6 | ||
| = | ₹ 70,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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