If a customer is making small but regular payments, is this an indication that an account...

If a customer is making small but regular payments, is this an indication that an account may be collectible?

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Expert Solution

Usually uncollectible accounts receivable are those amounts which are outstanding for a longer period of time and recovery from that receivables have not been received from a long period. Also if a customer is making regular payments even though small in amount but the regularity shows that the account may be collectible s there is constant receipt of payment from the customer.

Also the amount though received is small but compared to the total outstanding amount it should be reasonable small amount and not negligible. Example if the customer outstanding amount is $100,000 and he is paying regular $10,000 then it can be considered small amount received. On the other hand if the customer is paying say an amount of.$100 then it is very hard to tell whether the account will be collectible as the amount is so negligible as compared to the total outstanding amount.

So if the customer is paying small but regular payments it can be an indication that an account may be collectible.

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ekkarill92 answered 1 year ago

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