Lesson: Accounts Receivable Aging Schedule

In this lesson, explore the practicalities of the Accounts Receivable Aging Schedule with an insightful walkthrough by Nick Palazzolo, CPA. He introduces this key financial tool, familiar to many in the industry but incredibly significant for those new to the field. With a detailed example, Nick demonstrates how to fill out the schedule's various columns and calculate estimated uncollectible amounts based on the age of the receivables, from current dues to those outstanding for longer periods. By applying percentages to different aging categories, he explains the process of accounting for uncollectible accounts receivable, highlighting the increasing likelihood of nonpayment over time. This lesson demystifies how to arrive at these essential estimations, providing clear guidance on managing and assessing credit risk using an aging schedule that is often generated by accounting software.