Which of the following statements is incorrect when arguing in favour of using the aging of accounts receivable method instead of the percentage of credit sales method? A. The aging of accounts receivable method generally results in a more accurate valuation of the net accounts receivable on the statement of financial position. B. The aging of accounts receivable method matches bad debts expense with credit sales in the same period. C. The aging of accounts receivable method takes into account past experience by adjusting for previous under- or overstatement of the allowance account. D. The aging of accounts receivable method is more difficult to implement than the percentage of credit sales method.

Assume for questions 7 to 9 that the aging of accounts receivable method is used to estimate bad debts expense. You prepare the following analysis of aged accounts receivable at the end of the hscal years, 2020 and 2021. (Hint: use T-accounts to keep track of the various details.) Analysis of Aged Accounts Receivable Not Yet Past Due Due 1-60 Over 60 Current Total days days Accounts receivable, S18,400 9/30/2020 $4,700 $1.600 $24,700 Accounts receivable, 24,300 5,600 2.000 $31.900 9/30/2021 Estimated % uncollectible 10% 40% 75%