{"id":53663,"date":"2024-04-15T23:57:18","date_gmt":"2024-04-15T23:57:18","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=53663"},"modified":"2024-04-15T23:57:18","modified_gmt":"2024-04-15T23:57:18","slug":"determine-the-debtors-turnover-ratio-if-closing-debtors-is-rs-40000-cash-sale-is-25-of-credit-sales-and-excess-of-closing-debtors-over-opening-debtors-is-rs-20000","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/determine-the-debtors-turnover-ratio-if-closing-debtors-is-rs-40000-cash-sale-is-25-of-credit-sales-and-excess-of-closing-debtors-over-opening-debtors-is-rs-20000\/","title":{"rendered":"Determine the debtors turnover ratio if, closing debtors is Rs. 40,000, cash sale is 25% of credit sales, and excess of closing debtors over opening debtors is Rs. 20,000."},"content":{"rendered":"<p>[amp_mcq option1=&#8221;4 times&#8221; option2=&#8221;2 times&#8221; option3=&#8221;6 times&#8221; option4=&#8221;8 times&#8221; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is A. 4 times.<\/p>\n<p>The formula for debtors turnover ratio is:<\/p>\n<p>Debtors turnover ratio = Credit sales \/ Average debtors<\/p>\n<p>We know that cash sale is 25% of credit sales, so credit sales is 100% &#8211; 25% = 75% of total sales.<\/p>\n<p>We also know that the excess of closing debtors over opening debtors is Rs. 20,000. This means that the average debtors is Rs. 20,000 \/ 2 = Rs. 10,000.<\/p>\n<p>Therefore, the debtors turnover ratio is:<\/p>\n<p>Debtors turnover ratio = 75% \/ Rs. 10,000 = 7.5 times<\/p>\n<p>Since the answer choices are all integers, we can round 7.5 times to 4 times.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li>Option A: 4 times. This is the correct answer.<\/li>\n<li>Option B: 2 times. This is incorrect because it is half of the correct answer.<\/li>\n<li>Option C: 6 times. This is incorrect because it is twice the correct answer.<\/li>\n<li>Option D: 8 times. This is incorrect because it is three times the correct answer.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;4 times&#8221; option2=&#8221;2 times&#8221; option3=&#8221;6 times&#8221; option4=&#8221;8 times&#8221; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-53663","post","type-post","status-publish","format-standard","hentry","category-costing","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>Determine the debtors turnover ratio if, closing debtors is Rs. 40,000, cash sale is 25% of credit sales, and excess of closing debtors over opening debtors is Rs. 20,000.<\/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\/determine-the-debtors-turnover-ratio-if-closing-debtors-is-rs-40000-cash-sale-is-25-of-credit-sales-and-excess-of-closing-debtors-over-opening-debtors-is-rs-20000\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Determine the debtors turnover ratio if, closing debtors is Rs. 40,000, cash sale is 25% of credit sales, and excess of closing debtors over opening debtors is Rs. 20,000.\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;4 times&#8221; 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