Your company has previously averaged about 16% of its accounts receivable in the "over 90 days past due" category.This year management forecasts that 20% of its accounts receivable will be in this category at the end of the current year.The company uses the aging of accounts receivable method of estimating Bad Debt Expense.If the total of credit sales and year-end balance in accounts receivable remain unchanged from the previous year and no write offs were made during the current year,this year's bad expense will:

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The older and more overdue an account receivable becomes,the less likely it is to be collectible.If the percentage of accounts in the "over 90 days" category increases,then the percentages in the "under 90 days" categories will decrease.Overall,the company's accounts receivable balances will be more overdue,which will result in higher Bad Debt Expense for the current year.

Your Company Has Previously Averaged About 16% of Its Accounts