Dictionary of Accounting Terms: relative frequency of occurrence
relative frequency of occurrence
proportion of times that an event occurs in the long run when the conditions are stable, or the observed relative frequency of an event in a very large number of trials. For example, suppose that an accounts receivable manager knows from past data that about 70 of 1000 accounts usually become uncollectible after 120 days. The manager would estimate the probability of bad debts as 70/1000 = .07 or 7%.
