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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Closing Trade Receivables ₹1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹40,000; Revenue from Operations, i.e., Net Sales ₹6,00,000. Calculate the Trade Receivables Turnover Ratio.
Let Credit Sales = x. Cash Sales = 25% of x = 0.25x.
Total Sales = Cash Sales + Credit Sales
6,00,000 = 0.25x + x = 1.25x
x = ₹4,80,000 (Credit Sales)
Closing Trade Receivables = Opening Trade Receivables + 40,000
1,00,000 = Opening Trade Receivables + 40,000
Opening Trade Receivables = ₹60,000
Average Receivables = (1,00,000 + 60,000) ÷ 2 = ₹80,000
Trade Receivables Turnover Ratio = Credit Sales ÷ Average Receivables = 4,80,000 ÷ 80,000 = 6 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.99 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
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