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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A firm normally has Trade Receivables equal to two months’ credit sales. During the coming year, it expects Credit Sales of ₹7,20,000, spread evenly over the year (12 months). What is the estimated amount of Trade Receivables at the end of the year?
Trade Receivables Collection Period = 12 Months ÷ Trade Receivables Turnover Ratio
2 = 12 ÷ Trade Receivables Turnover Ratio
Trade Receivables Turnover Ratio = 6
Trade Receivables Turnover Ratio = Credit Sales ÷ Closing Trade Receivables
6 = 7,20,000 ÷ Closing Trade Receivables
Closing Trade Receivables = 7,20,000 ÷ 6 = ₹1,20,000
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.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.103 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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