A break-down of accounts receivable according to the length of time outstanding is known as a(n):
A) amortization schedule.
B) sources of cash flow statement.
C) receivables inventory.
D) aging schedule.

Question

Quizplus · Accepted Answer

An aging schedule is a report that categorizes a company's accounts receivable according to the length of time they have been outstanding, typically broken down into categories such as 0-30 days, 31-60 days, 61-90 days, and over 90 days. This report helps companies to identify problem accounts and take action to collect outstanding balances. The other choices (amortization schedule, sources of cash flow statement, and receivables inventory) do not relate specifically to the breakdown of accounts receivable by age.

A Break-Down of Accounts Receivable According to the Length of Time