{"id":45841,"date":"2024-04-15T22:03:48","date_gmt":"2024-04-15T22:03:48","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=45841"},"modified":"2024-04-15T22:03:48","modified_gmt":"2024-04-15T22:03:48","slug":"80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/","title":{"rendered":"80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;45 days and Rs. 1,00,000&#8243; option2=&#8221;360 days and Rs. 1,00,000&#8243; option3=&#8221;45 days and Rs. 8,00,000&#8243; option4=&#8221;360 days and Rs. 1,25,000&#8243; correct=&#8221;option3&#8243;]<!--more--><\/p>\n<p>The correct answer is C. 45 days and Rs. 8,00,000.<\/p>\n<p>Receivable turnover is a measure of how quickly a company collects its receivables. It is calculated by dividing net credit sales by average accounts receivable. In this case, the receivable turnover is 8, which means that the company collects its receivables on average every 90 days (360 \/ 8 = 45).<\/p>\n<p>We know that 80% of the company&#8217;s sales are on credit, so the company&#8217;s net credit sales are 0.8 * 10,00,000 = 8,00,000. We also know that the company&#8217;s average accounts receivable are 8,00,000. Therefore, the average collection period is 45 days.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A is incorrect because the average collection period is 45 days, not 360 days.<\/li>\n<li>Option B is incorrect because the average receivables are 8,00,000, not 1,00,000.<\/li>\n<li>Option C is correct because the average collection period is 45 days and the average receivables are 8,00,000.<\/li>\n<li>Option D is incorrect because the average collection period is 45 days, not 360 days.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;45 days and Rs. 1,00,000&#8243; option2=&#8221;360 days and Rs. 1,00,000&#8243; option3=&#8221;45 days and Rs. 8,00,000&#8243; option4=&#8221;360 days and Rs. 1,25,000&#8243; correct=&#8221;option3&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-45841","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;45 days and Rs. 1,00,000&#8243; option2=&#8221;360 days and Rs. 1,00,000&#8243; option3=&#8221;45 days and Rs. 8,00,000&#8243; option4=&#8221;360 days and Rs. 1,25,000&#8243; correct=&#8221;option3&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T22:03:48+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/","og_locale":"en_US","og_type":"article","og_title":"80% of sales of Rs. 10,00,000 of a firm are on credit. It has a receivable turnover of 8. What is the average collection period (360 days a year) and average debtors of the firm?","og_description":"[amp_mcq option1=&#8221;45 days and Rs. 1,00,000&#8243; option2=&#8221;360 days and Rs. 1,00,000&#8243; option3=&#8221;45 days and Rs. 8,00,000&#8243; option4=&#8221;360 days and Rs. 1,25,000&#8243; correct=&#8221;option3&#8243;]","og_url":"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2024-04-15T22:03:48+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/","url":"https:\/\/exam.pscnotes.com\/mcq\/80-of-sales-of-rs-1000000-of-a-firm-are-on-credit-it-has-a-receivable-turnover-of-8-what-is-the-average-collection-period-360-days-a-year-and-average-debtors-of-the-firm\/","name":"80% of sales of Rs. 10,00,000 of a firm are on credit. 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