PRC-1 · Chapter 5 · Question 37 of 100
An aged receivables analysis groups customers by the time their invoice has been outstanding. Which of the following intervals generally attracts the highest percentage allowance?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Over 120 days
Explanation
The longer a debt remains unpaid, the higher the statistical chance of it becoming irrecoverable. Therefore, the oldest age bracket (e.g., over 120 days) receives the highest percentage allowance.
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