Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

Alex runs a business that sells computer equipment. He supplied the information below for the year ended 31 July 2023.
(a)[3]

Calculate the trade receivables turnover (days) for the year ended 31 July 2023. State the formula that was used.

(b(i))[1]

State the formula used for calculating the rate of inventory turnover (times).

(b(ii))[3]

Calculate the closing inventory at 31 July 2023.

(c)[3]

Calculate the trade payables turnover (days) for the year ended 31 July 2023. State the formula that was used.

(d)[5]

Advise Alex whether his understanding is correct. Justify your answer.

Worked solution & mark scheme

This 15-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Formula used: Trade receivables / Credit sales \times 365” …

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