Question

A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:

Answer 1

Answer:

The answer is aging of accounts receivable method.

Explanation:

This method helps accountants in determining how much of a company’s account receivables would not be collected. This is related to unpaid invoices of a company’s customers. Though invoices usually have due dates, according to the company, customers who haven’t paid even after the due date has passed must be calculated using this method for more accurate accounting reporting.