PRC-1 · Chapter 5 · Question 9 of 100
When preparing an aging analysis of accounts receivable, which category of customers statistically carries the highest probability of defaulting on their debt?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Receivables aged over 90 days past due
Explanation
Aging analysis operates on the principle that the older a debt becomes, the less likely it is to be collected. Therefore, debts outstanding for the longest period (over 90 days) carry the highest risk of default.
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