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Argument by Analogy: A friend of yours is convinced of the influence of the Moon on everyday human affairs. He cites a supposed correlation between crime and the occurrence of a full moon as proof. He even speculates that the gravitational influence of the Moon is the mechanism by noting that it is the gravitational pull of the Moon that causes the tides. "After all", he argues, "as over half a human's weight is water, the Moon must affect the flow of blood in human beings!" How would you explain to your friend that this analogy, between the ocean tides and water in the human body, is profoundly flawed. Are there any alternate explanations for a link between moon phase and crime?
Bad Debts
Receivables from accounts deemed not collectable, which constitute financial losses for the business.
Accounts Receivable Turnover
A financial ratio that measures how many times a company collects its average accounts receivable balance within a specific period.
Net Sales
The net sales revenue of a company, calculated after deducting returns, allowances for damage or loss, and any discounts.
Allowance Method
The allowance method is an accounting approach that estimates and reports bad debts as an expense and accounts for receivables that are not expected to be collected.
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