Total Purchases Rs4 50 000 Cash Purchases Rs1 50 000 Creditors Rs50 000 Bills Payable Rs10 000 Trade...........

Total Purchases Rs4,50,000; Cash Purchases Rs1,50,000; Creditors Rs50,000; Bills Payable Rs10,000. Trade Payables Turnover Ratio will be :

7.5 times

6 times

9 times

5 times

- Total Purchases: Rs 4,50,000 is the total value of goods bought.

- Cash Purchases: Rs 1,50,000 is the portion paid in cash.

- Credit Purchases: It equals total purchases minus cash purchases: Rs 4,50,000 - Rs 1,50,000 = Rs 3,00,000.

- Creditors: Rs 50,000 represents the amount owed to suppliers.

- Bills Payable: Rs 10,000 is another form of short-term liability.

- Trade Payables: These are creditors and bills payable combined: Rs 50,000 + Rs 10,000 = Rs 60,000.

- Trade Payables Turnover Ratio: Formula is Credit Purchases divided by Trade Payables, which is Rs 3,00,000/Rs 60,000 = 5 times.

- Correct Answer: Option 4 - 5 times

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