Archer Company and Zorro Company Both Have Significant Amounts of Accounts

question 111

Multiple Choice

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.Which of the following statements is FALSE?

• A) Zorro Company's method complies with GAAP.
• B) Archer Company's method will provide better matching of revenues and expenses.
• C) Archer Company's net income is more accurate due to their accounting method.
• D) Zorro Company's method does not provide good matching of revenues and expenses.

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Definitions:

Dutch Shipping

Relates to the Netherlands' historically significant maritime sector, known for its advanced shipbuilding technology and extensive trade networks.

New Amsterdam

The 17th century Dutch colony that later became New York City after being seized by the English in 1664.

Chesapeake Planters

Wealthy and influential landowners in the Chesapeake Bay region during the colonial and early United States periods, known for cultivating tobacco as a cash crop using enslaved labor.

Indentured Servants

Individuals who agreed to work for a specified number of years in exchange for passage to a new country, room, board, and often eventual freedom, a common practice in colonial America.