The percentage of credit sales method is simpler but less accurate than the aging method for calculating bad debts.

Question

Quizplus · Accepted Answer

The percentage of credit sales method calculates bad debts as a percentage of total credit sales, while the aging method takes into account the age of individual receivables and applies different estimated percentages for each age category. The aging method is generally considered more accurate, but also more complex.

The Percentage of Credit Sales Method Is Simpler but Less