The worked question on this page is original educational practice. It is not represented as a question from an official previous-year examination paper.
01 / UNDERSTANDING
Review the question
Create an original trading case where net receivables are positive but the earliest payment still creates a gap. Hold total receivables above payables while reversing their timing advantage. An original checkpoint is: What is the cash gap on the supplier’s day-ten due date? Supported answer: 3,000 units. Explain the decisive fact, then alter one condition and solve again. This is an original practice method, not a claim that the question appeared in an official past paper.
02 / UNDERSTANDING
The concept in context
An overdue receivable may require follow-up; its recorded amount should not be treated as cash already available. A useful study check is to identify which party owes each balance, then flag late or uncertain receipts separately. Explain why the method fits the stated facts before applying it to a changed situation.
03 / UNDERSTANDING
A worked learning case
A fictional trader has customer receivables of 5,000 due on day twenty and supplier payables of 4,000 due on day ten, with only 1,000 cash today. Although receivables exceed payables in total, the earlier supplier date creates a 3,000 cash gap before collections. The timing mismatch remains visible only when both sides are dated.
ORIGINAL EDUCATIONAL PRACTICE
Try it before you check.
What is the cash gap on the supplier’s day-ten due date?
Show the answer and reasoning
3,000 units.
The payable is 4,000 and available cash before collection is 1,000, giving a gap of 3,000. The receivable of 5,000 is not due until day twenty, so it cannot be assumed available on day ten. Comparing only total receivables and payables would miss the mismatch between their payment dates.
Two traps to watch for.
- Netting receivables against payables without checking due dates.
- Treating an overdue customer balance as dependable cash.
YOUR TOPIC-SPECIFIC LEARNING MAP
Learn from the attempt
Identify which party owes each balance.
Order collections and payments by due date.
Flag late or uncertain receipts separately.
Explain the idea, apply it to a new situation, then check what changed in your reasoning.
BANKERS TUTORIAL · SOURCE NOTES
Keep the source alongside your notes.
Official links provide subject context and authoritative reference material. This guide’s explanation, scenario and question are original Bankers Tutorial learning content.
- www.rbi.org.in https://www.rbi.org.in/commonman/images/FAME%20Booklet%20second%20edition/FAME%20Booklet%20English/FAME30072020.pdf
- www.rbi.org.in https://www.rbi.org.in/scripts/DataDefinition.aspx
For Banking foundations preparation, check the current official notice before relying on changing dates, rules or examination requirements.
