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

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The percent-of-sales method is a GAAP-compliant method for accounting for uncollectible accounts and is considered a better matching of revenues and expenses than the direct write-off method.

Archer Company and Zorro Company Both Have Significant Amounts of Accounts