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Home Questions R4M7FKX8C6
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

What is the numerator to be used in the trade receivables turnover ratio?

Options:

Net credit sales

Net credit purchases

Net cash sales

Net cash purchases

Correct Answer:

Net credit sales

Explanation:

Trade Receivables Turnover Ratio
 It expresses the relationship between credit revenue from operations and trade receivable. It is calculated as follows :
Trade Receivable Turnover ratio = Net Credit Revenue from Operations/Average Trade Receivable

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