From the following calculate Debtors Turnover Ratio:
(a) Annual credit sales Rs. 25,000.
(b) Returns inwards Rs. 1,000.
(c) Debtors Rs. 3,000.
(d) Bills receivables Rs. 1,000.
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From the following calculate Debtors Turnover Ratio:
(a) Annual credit sales Rs. 25,000.
(b) Returns inwards Rs. 1,000.
(c) Debtors Rs. 3,000.
(d) Bills receivables Rs. 1,000.
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Answer:hope it helps u
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Explanation:Total sales = Rs. 4,00,000
Cash sales = 20% of total sales
Debtor beginning of the year = Rs. 40,000
Debtors end of the year = Rs. 1,20,000
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Updated on 2022-09-05
Solution
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Correct option is B)
Average debtors = (Rs. 40,000 + Rs.
1,20,000)/2 = Rs. 80,000
Cash sales = 20% of total sales
= Rs. 4,00,000 x 20%
= Rs. 80,000
Net credit sales = Total sales - Cash sales
= Rs. 4,00,000 - Rs. 80,000
= Rs. 3,20,000
Debtors turnover ratio = Net credit sales/
Average debtorsRs. 3,20,000/Rs.
80,000
= 4 Times