Question 92 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 92 Chapter 4 of +2-B

Question 92 Chapter 4 of +2-B

Trade Receivables Turnover Ratio

92. From the information given below, calculate Trade Receivables Turnover Ratio:
Credit Revenue from Operations, i.e., Credit Sales Rs. 8,00,000; Opening Trade Receivables Rs. 1,20,000; and Closing Trade Receivables Rs. 2,00,000.
State giving reason, which of the following would increase, decrease or not change Trade Receivables Turnover Ratio:
(i) Collection from Trade Receivables Rs. 40,000.
(ii) Credit Revenue from Operations, i.e., Credit Sales Rs. 80,000.
(iii) Sales Return Rs. 20,000.
(iv) Credit Purchase Rs. 1,60,000.

 

The solution of Question 92 Chapter 4 of +2-B: –

 

Average Trade Receivable Opening Trade Receivable + Closing Trade Receivable
2
  Rs. 1,20,000 + Rs. 2,00,000
2
  = Rs. 1,60,000
Trade Receivables Turnover Ratio = Net Credit Sales
    Average Trade Receivable
  = Rs. 8,00,000
Rs. 1,60,000
  = 5 Times

 

Transactions
Impact on Trade Receivables Turnover Ratio
Reason
Collection from Trade Receivables Rs.
40,000.
Increase The amount of Closing Trade Receivable is decrease and no change in Net credit Sales.
     
(ii) Credit Revenue from Operations, i.e.,
Credit Sales Rs. 80,000.
Decrease There will be an increase in both Net credit sales and average trade receivables with closing trade receivables.
     
(iii) Sales Return Rs. 20,000. Increase There will be a decrease in both Net credit sales and average trade receivables.
     
(iv) Credit Purchase Rs. 1,60,000. No Change The amounts of both net credit sales and average trade sales.
     

 

 

 

 

 

 

 

Balance Sheet: Meaning, Format & Examples

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Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

  • Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
  • Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
  • Chapter No. 3 – Goodwill: Nature and Valuation
  • Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
  • Chapter No. 5 – Admission of a Partner
  • Chapter No. 6 – Retirement/Death of a Partner
  • Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

  • Chapter No. 1 – Financial Statements of a Company
  • Chapter No. 2 – Financial Statement Analysis 
  • Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
  • Chapter No. 4 – Accounting Ratios
  • Chapter No. 5 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 3 min 225x300 - Question 92 Chapter 4 of +2-B  - T.S. Grewal 12 Class
T.S. Grewal’s Analysis of Financial Statements

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