Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

From the following information Calculate Trade Receivable Turnover Ratio:
Revenue from Operations - 2,00,000
Cash Revenue from Operations- 80,000
Debtors as on 1st April 2020 - 40,000
Debtors as on 31st March 2021 - 20,000

Options:

4 times

6 times

2 times

3 times

Correct Answer:

4 times

Explanation:

T.R.T.R = Credit Revenue From Operations/ Average Trade Receivables
           = 120000/30000
           = 4 times
Credit Revenue = 2,00,000 - 80,000
                         = 1,20,000
Average Trade Receivables = (40000 + 20000)/2
                                           = 30,000