Question : The formula for calculating Trade Payables Turnover Ratio is -
Option 1: Net Credit purchase / Average creditors
Option 2: Net Credit purchase / Avg. creditors + Avg. bills payable
Option 3: Cash Purchase / Total Creditors
Option 4: None of the above
Correct Answer: Net Credit purchase / Avg. creditors + Avg. bills payable
Solution : The formula for calculating Trade Payables Turnover Ratio is -
Net Credit purchase / (Avg. creditors + Avg. bills payable)
Hence the correct answer is option 2.
Question : -------------------ratio indicates the relationship between credit purchases and average trade payables during the year.
Option 1: Trade receivable turnover ratio
Option 2: Trade payable turnover ratio
Option 3: Inventory turnover ratio
Option 4: Current ratio
Question : ------------------- ratio indicates the relationship between credit revenue from Operations and average trade receivables during the year.
Option 1: Inventory turnover ratio
Option 2: Capital turnover ratio
Option 3: Trade receivable turnover ratio
Option 4: Trade payable turnover ratio
Question : What does Creditors Turnover Ratio take into account:
Option 1: Total credit purchases
Option 2: Total credit sales
Option 3: Total cash purchases
Option 4: Total cash sales
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