What does account aging refer to?

• A. Forecasting sales
• B. Tracking past due accounts
• C. Managing inventory
• D. Recording revenue

Answer: (B)

Account aging is evaluating how long payments on accounts receivable have been outstanding. By sorting balances into aging categories (such as current, 30 days overdue, 60 days overdue, 90+ days), a business can see which customers haven’t paid on time and prioritize follow-up to improve cash flow. In a travel and tourism setting, this helps a agency or tour operator monitor payments from clients and partners and take timely collection actions.

Forecasting sales focuses on predicting future revenue, not on how long payments have been due. Managing inventory deals with stock levels, not money owed. Recording revenue concerns when revenue is recognized, not how long it takes for payments to come in.