The method of estimating uncollectible accounts based on the length of time the amount is owed by the customer is referred to as the:

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The aging method involves categorizing the accounts receivable by the length of time that they have been outstanding and then applying a percentage for each category to estimate the amount that will ultimately be uncollectible. This method is widely used and considered to be more accurate than the direct write-off method which only recognizes bad debts when they are actually determined to be uncollectible. The activity method and the realization method are not typically used for estimating uncollectible accounts.

The Method of Estimating Uncollectible Accounts Based on the Length