Note—On the Cyert-Davidson-Thompson Doubtful Accounts Model

The results of the classical Cyert, Davidson, and Thompson (CDT) model for estimating the allowance for doubtful accounts could be made more valuable by correcting one flaw. The CDT model rests on the total balance method of aging dollars and, as presented, its answers cannot wisely be applied to estimate real dollar amounts. Notably, the steady state distributions derived by the model tend to underestimate actually paid dollar amounts.