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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate the Trade Receivables Turnover Ratio from the following information:
| Particulars | Opening Balance (₹) | Closing Balance (₹) |
|---|---|---|
| Sundry Debtors | 28,000 | 25,000 |
| Bills Receivable | 7,000 | 15,000 |
| Provision for Doubtful Debts | 2,800 | 2,500 |
Total Sales ₹1,00,000; Sales Return ₹1,500; Cash Sales ₹23,500.
Net Credit Sales = Total Sales − Sales Return − Cash Sales = 1,00,000 − 1,500 − 23,500 = ₹75,000
Average Receivables = (Opening Debtors + Opening Bills Receivable + Closing Debtors + Closing Bills Receivable) ÷ 2
= (28,000 + 7,000 + 25,000 + 15,000) ÷ 2 = ₹37,500
Trade Receivables Turnover Ratio = Net Credit Sales ÷ Average Receivables = 75,000 ÷ 37,500 = 2 times
Note: Receivables are taken at their gross value here (before deducting the Provision for Doubtful Debts).
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.97 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
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