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Aging Definition

October 28, 2016

Kaylee DeWitt

Short Definition

Aging refers to the number of days an invoice is past due.

Extended Definition

Aging is often associated with accounts receivable—the customers that owe money to the business for items they bought on credit. By using aging, business owners can see how far past due their accounts receivable are. Aging of accounts receivable can also be used to calculate out how much money a business will most likely not receive from unpaid customer bills. This calculation is called an allowance for doubtful accounts.

 

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