An advantage of relating a company's bad debt experience to its accounts receivable is that this approach:

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Relating a company's bad debt experience to its accounts receivable gives a reasonably accurate measurement of the net realizable value of the accounts receivable in the balance sheet. This approach takes into consideration the experience of the company in collecting its receivables, which provides a more realistic estimate of the amount that is expected to be collected from the customers. It also helps in identifying any potential problems with the company's collection process and allows for timely corrective action. This approach, however, does require estimates of uncollectible accounts and knowledge of the balance in the allowance for doubtful accounts before adjustment for bad debt expense.

An Advantage of Relating a Company's Bad Debt Experience to Its