Debtors’ Age Analysis (Grade 12 NSC Matric Accounting): Flashcards
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Debtors' age analysis definition
Debtors' age analysis definition
Tool breaking down debtor accounts by time for credit control
Returns subtracted from which invoices? (Rule 1)
Returns subtracted from which invoices? (Rule 1)
Most recent invoice/latest sale
Payments subtracted from which balance? (Rule 2)
Payments subtracted from which balance? (Rule 2)
Oldest outstanding balance first
Main benefit of regular debtors' age analysis
Main benefit of regular debtors' age analysis
Maintain healthy cash flow & prevent financial problems
Four time period categories in age analysis
Four time period categories in age analysis
Current, 30 Days, 60 Days, 90+ Days
Where should most debtor balances be?
Where should most debtor balances be?
In current and 30-day categories
Ideal debt distribution percentages
Ideal debt distribution percentages
70% current, 25% at 30 days, 5% in older categories
How discounts treated in age analysis
How discounts treated in age analysis
Same as receipts - deducted from oldest balance first
Verification check for age analysis totals
Verification check for age analysis totals
Sum of all age categories must equal total debtor balance
Common payment periods for credit terms
Common payment periods for credit terms
30 or 60 days