From a balance sheet perspective,the percentage-of-receivables method is typically preferable because assets (net accounts receivable)are reported closer to their net realizable value.

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The percentage-of-receivables method adjusts the allowance for doubtful accounts based on the estimated percentage of total accounts receivable that will not be collected. This results in a more accurate estimation of the net realizable value of accounts receivable, which is reported on the balance sheet as net accounts receivable. Therefore, this method is typically preferred because it results in assets being reported closer to their true value.

From a Balance Sheet Perspective,the Percentage-Of-Receivables Method Is Typically Preferable