Illustration 8-3 gives a great example of the procedure for estimating bad debt expense using percentage-of-sales. I would like to emphasize the income statement point of view, which matches bad debt expense with revenues in the same period. Once check we always perform before issuing final financial statements is that bad debt expense should never be more than the receivables. Is there ever a situation where this could occur? Are there any other "sanity checks" you can identify to ensure bad debt expense is not overstated?