Ethics and Estimates in Accounting

In the software package, there is a worksheet that you can adjust the "expected" timing of collecting accounts receivable.  Generally, the longer it takes to collect an account receivable balance from a customer, the more difficult it becomes.  Eventually, the customer may have to be considered an uncollectable account or a "bad debt."  To adhere to the "matching rule," the company must estimate losses from uncollectable accounts and them expense them in the year they were made.