CUET CUET Accountancy 2024 - Calculate Trade Receivables Turnover Ratio. | PYQs + Solutions

CUET Accountancy 2024

Accountancy

Accounting Ratios

Easy

Particulars	₹
Revenue from Operations	8,75,000
Creditors	90,000
Bills Receivable	48,000
Bills Payable	52,000
Purchases	4,20,000
Trade Debtors	59,000

Calculate Trade Receivables Turnover Ratio.

8.18 times

8.23 : 1

8.18%

8.81 : 1

Correct Option: 1

Trade Receivables Turnover Ratio

The Trade Receivables Turnover Ratio is calculated as:

\text{Trade Receivables Turnover Ratio} = \frac{\text{Revenue from Operations}}{\text{Average Trade Receivables}} = \frac{8,75,000}{1,07,000} = 8.18 \text{ times}

Note: Since opening balances of debtors and bills receivables are not available, the year-end figures are used as average trade receivables.

\text{Average Trade Receivables} = \text{Bills Receivable} + \text{Trade Debtors} = 48,000 + 59,000 = 1,07,000

This ratio reflects how efficiently a firm collects cash from its trade receivables. It is expressed in times, indicating how often receivables are converted into cash during the accounting period, and not as a percentage.

CUET Accountancy 2024 PYQs

Calculate Trade Receivables Turnover Ratio.

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