Creditors Turn Over Ratio

 

It indicates the number of times sundry creditors have been paid during a year.  It is calculated to judge the requirements of cash for paying sundry creditors.  It is calculated by dividing the net credit purchases by average creditors.cost accounting creditor turnover ratio  2 2nd year bcca

Net credit purchases consist of gross credit purchases minus purchase return

When the information about credit purchases, opening and closing balances of trade creditors is not available then the ratio is calculated by dividing total purchases by the closing balance of trade creditors.

cost accounting creditor turnover ratio  2nd year bcca

 

 

 

 

 

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