Bad debts, allowance for doubtful debts, ageing analysis and debtor turnover

What this note covers

1. Two ways of accounting for debtors who might not pay
2. Worked example: writing off a bad debt
3. Worked example: adjusting the allowance for doubtful debts
4. Reading and building an ageing analysis
5. Calculating debtor turnover in times and days
6. Linking bad debts, the allowance and ageing to credit decisions
7. How this content is examined and what separates a top response

7 sections · 9 key terms & formulas · 6 common mistakes