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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate the Trade Payables Turnover Ratio from the following information: Opening Creditors ₹1,25,000; Opening Bills Payable ₹10,000; Closing Creditors ₹90,000; Closing Bills Payable ₹5,000; Purchases ₹9,50,000; Cash Purchases ₹1,00,000; Purchases Return ₹45,000.
Net Credit Purchases = Purchases − Cash Purchases − Purchases Return
= 9,50,000 − 1,00,000 − 45,000 = ₹8,05,000
Average Trade Payables = (Opening Creditors + Opening Bills Payable + Closing Creditors + Closing Bills Payable) ÷ 2
= (1,25,000 + 10,000 + 90,000 + 5,000) ÷ 2 = ₹1,15,000
Trade Payables Turnover Ratio = Net Credit Purchases ÷ Average Trade Payables = 8,05,000 ÷ 1,15,000 = 7 times
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.110 - 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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