Target Exam

CUET

Subject

-- Accountancy Part B

Chapter

Accounting Ratios

Question:

Calculate credit revenue from operations using following information:

Total revenue from operations: ₹4,00,000
Cash received from operations are 25% of Credit revenue from operations.

Options:

₹80,000

₹1,60,000

₹3,20,000

₹4,00,000

Correct Answer:

₹3,20,000

Explanation:

The correct answer is option 3- ₹3,20,000.

Total revenue from operations: ₹4,00,000
Cash received from operations are 25% of Credit revenue from operations.

Let credit revenue from operations = x
Cash revenue from operations = 25% of x

x + 25% of x = 4,00,000
x + x/4 = 4,00,000
(4x + x)/4 = 4,00,000
5x/4 = 4,00,000
x = 4,00,000 x 4/5
   = 3,20,000

Thus, credit revenue from operations is ₹3,20,000.