Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 15 - No. 21)
What is the primary purpose of the aging of receivables method?
To calculate the total sales for a period.
To estimate the allowance for doubtful accounts.
To track the payment history of customers.
To determine the net realizable value of inventory.
Explanation
The aging of receivables method estimates the allowance based on how long receivables have been outstanding.
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