What happens to money owed if it remains uncollected for 90 days?

When money owed remains uncollected for 90 days, the typical accounting practice is to classify it as bad debt. This classification reflects the assessment that the likelihood of collecting the outstanding amount is low, indicating that this receivable may not be recoverable.

Recognizing uncollected debt as bad debt is crucial for maintaining accurate financial records and providing a realistic view of an organization's assets. By marking the debt this way, businesses can more effectively manage their accounts receivable and make necessary adjustments to their financial statements.

This practice also aligns with generally accepted accounting principles, where expenses and potential losses are recognized in a timely manner to ensure that financial reports represent the company’s true financial position. While the other choices may imply actions taken after a certain period of uncollected funds, classifying as bad debt is the standard practice after this timeframe to reflect the risk of non-collection adequately.