What does Aging of Accounts means?
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It is to classify the transactions.
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It is to classify the accounts on the basis of nature of company.
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It is to classify the accounts on the basis of different ledgers.
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It is to classify the accounts on the basis of billing or due date.
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None of these
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Explanation
AGING OF ACCOUNTS is the classification of accounts by the time elapsed after the date of billing or the due date. The longer a customers account remains uncollected or the longer inventory is held, the greater is its realization risk.
Aging of accounts is the technique to classify accounts according to billing or due date. In this classification, we get the idea to whom, we have to get first and to whom, we have to pay first.