Even though the percentage-of-receivables method and the percentage-of-credit-sales method use different accounts to estimate future uncollectible accounts,the amount of bad debt expense reported in the income statement will always be the same under the two methods.Bad debt expense will typically differ between the two methods.

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The two methods can result in different amounts of bad debt expense being reported in the income statement because they use different accounts and different estimates. The percentage-of-receivables method estimates bad debt expense based on the balance in the accounts receivable account, while the percentage-of-credit-sales method estimates bad debt expense based on the amount of credit sales made during the period. As a result, the two methods can result in different amounts of bad debt expense being recognized in the income statement.

Even Though the Percentage-Of-Receivables Method and the Percentage-Of-Credit-Sales Method Use