Aging Schedule Of Accounts Receivable
A compilation of accounts receivable by the age of account. Typically, this relationship is evaluated by using the average collection period ratio. This type of analysis can be extended by constructing an aging-of-accounts-receivable table. The following table shows an example of decline in the quality of accounts receivable from January to February as relatively more accounts have been outstanding for 61 days or longer. This breakdown allows analysis of the cross-sectional composition of accounts over time. A deeper analysis can assess the risk associated with specific accounts receivable, broken down by customer to associate the probability of payment with the dollar amount owed.