Discussion Forum : Accounting Ratios
Question -
Determine debtors turnover ratio if, closing debtors is Rs 40,000, total sales is Rs 4,00,000. Credit sales is 25% of total sales and excess of closing debtors over opening debtors is Rs 30,000.
Answer: Option A
:
A
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:
A
Credit Sales = 25% of Rs, 4,00,000
= Rs 1,00,000.
Closing Debtors = Rs 40,000
Opening Debtors = Rs 40,000 - Rs 30,000
= Rs 10,000
Average Debtors = (Rs 40,000 + Rs 10,000)/2
= Rs 25,000
Debtors turover ratio = Rs 1,00,000 / Rs 25,000
= 4 times
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