Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
₹1,75,000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. If the Trade Receivables Turnover Ratio is 8 times, calculate the Trade Receivables at the beginning and at the end of the year. Trade Receivables at the end is ₹7,000 more than that at the beginning.
Average Receivables = Net Credit Sales ÷ Trade Receivables Turnover Ratio = 1,75,000 ÷ 8 = ₹21,875
Let Opening Trade Receivables = x. Closing Trade Receivables = x + 7,000.
Average Receivables = (x + x + 7,000) ÷ 2
21,875 = (2x + 7,000) ÷ 2
43,750 = 2x + 7,000
2x = 36,750
x = ₹18,375 (Opening Trade Receivables)
Closing Trade Receivables = 18,375 + 7,000 = ₹25,375
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.107 - 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.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.107 - Accounting Ratios" instantly.