A business which is rapidly expanding year by year, would exaggerate the amount of its apparent profits if it followed this system. Or take a concern which has been newly converted into a limited liability company. A company in such a case is bound to provide out of revenue a reserve for bad and doubtful debts sufficient to cover the unascertained losses as nearly as they can be estimated. Moreover, when it is considered how in nearly every business it is almost impossible to estimate the amount of unascertained losses with any degree of accuracy, it will be seen that a system of providing for bad debts based on average experiences is the best and most practicable. In order to exercise an eflieient oversight of debts which have become doubtful, the balance on the debtors’ accounts should be transferred from the ordinary ledger to a bad debt ledger or register immediately the giving of further credit has ceased.