## Lakshya Education MCQs

Question: Determine debtors turnover ratio if, closing debtors is Rs 40,000, total sales is Rs 4,00,000. Credit sales is 25% of total sales and excess of closing debtors over opening debtors is Rs 30,000.
Options:
 A. 4 Times B. 2 times C. 6 times D. 8 times
: A

Credit Sales = 25% of Rs, 4,00,000
= Rs 1,00,000.

Closing Debtors = Rs 40,000
Opening Debtors = Rs 40,000 - Rs 30,000
= Rs 10,000

Average Debtors = (Rs 40,000 + Rs 10,000)/2
= Rs 25,000

Debtors turover ratio = Rs 1,00,000 / Rs 25,000
= 4 times

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## More Questions on This Topic :

Question 1. What will be the operating profit ratio, if operating ratio is 83.64%?
1.    11.06%
2.    83.64%
3.    16.36%
4.    None of these
: C

Operating Profit Ratio = 100% - operating ratio

=100%- 83.64% = 16.36%
Question 2. A ______ working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.
1.    Low
2.    High
3.    Moderate
4.    None of these
: A

A lowworking capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.
Question 3. Trade payables turnover ratio is expressed in terms of ___
1.    Percentage
2.    Times
3.    Days
4.    None of these
: B

Payables turnover ratio is expressed in terms of times.
Question 4. Trade receivables turnover ratio is expressed in terms of ___
1.    Percentage
2.    Times
3.    Days
4.    None of these