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

Net credit sales

The correct answer is option 1- Net credit sales.

Net credit sales is the numerator to be used in the trade receivables turnover ratio.

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.

The liquidity position of the firm depends upon the speed with which trade receivables are realised. This ratio indicates the number of times the receivables are turned over and converted into cash in an accounting period. Higher turnover means speedy collection from trade receivable. This ratio also helps in working out the average collection period.