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Home Questions 3626D6HZHZ
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

Read the following information carefully and answer the next 5 questions:

PARTICULARS AMOUNT (₹)
Revenue from operations 8,75,000
Creditors 90,000
Bills Receivables 48,000
Bills Payables 52,000
Purchases 4,20,000
Trade debtors 59,000

Calculate average collection period.

Options:

30 days

60 days

45 days

15 days

Correct Answer:

45 days

Explanation:

The correct answer is option 3- 45 days.

Average collection period = 365 / Trade receivables turnover ratio
                                     = 365/8.18
                                     = 44.62 or 45 days

CUET Questions