Archer Company and Zorro Company both have significant amounts of accounts receivable at any time and both experience bad debts from time to time.Archer uses the percentage of sales method to account for bad debts and Zorro uses the direct write-off method.Archer Company's method complies with IFRS and produces a better matching of revenues and expenses than Zorro Company's method.

Question

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The percentage of sales method used by Archer Company is in compliance with IFRS and matches revenues and expenses better than Zorro Company's direct write-off method.

Archer Company and Zorro Company Both Have Significant Amounts of Accounts