Information gained from an aging analysis of trade receivables provides management with insights regarding future cash flows,losses due to uncollectible accounts,and the general effectiveness of the credit and collection activities of the entity.

Question

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An aging analysis of trade receivables helps management in understanding the timing of expected cash collections, identifying accounts that may be uncollectible, and evaluating the effectiveness of credit and collection activities. Therefore, the statement is true.

Information Gained from an Aging Analysis of Trade Receivables Provides