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- Title
ESTIMATION OF THE ALLOWANCE FOR DOUBTFUL ACCOUNTS BY MARKOV CHAINS.
- Authors
Cyert, R. M.; Davidson, H. J.; Thompson, G. L.
- Abstract
The article discusses the use of Markov chains in estimating the allowance for doubtful accounts. According to the author, for retailers and other businesses that use the reserve method in their accounting for bad debts, the allowance for potentially doubtful accounts can have a direct effect on income. The author notes the importance of accurately estimating the allowance of doubtful accounts for businesses and retailers who have a significant portion of their assets tied up in accounts receivable.
- Subjects
MARKOV processes; DISTRIBUTION (Probability theory); ACCOUNTS receivable; ACCOUNTS payable; UNCOLLECTIBLE accounts; RISK management in business; RISK assessment; MANAGEMENT science; RETAIL industry; CHARGE accounts; COLLECTING of accounts; ESTIMATION theory
- Publication
Management Science, 1962, Vol 8, Issue 3, p287
- ISSN
0025-1909
- Publication type
Article
- DOI
10.1287/mnsc.8.3.287