What is the unique balance sheet disclosure that the Allowance Method requires, as opposed to the direct write-off method of accounting for bad debts? a) There is no balance sheet disclosure required – there is only an expense recognized on the income statement. b) The accounts receivable balance is reported gross instead of net c) An allowance for doubtful accounts is added to the balance sheet, which nets against gross accounts receivable. The net accounts receivable under this method represents the estimated balance that will actually be collected. d) Certain customers do not have to pay their balance under this method.

What is the unique balance sheet disclosure that the Allowance Method requires, as opposed to the direct write-off method of accounting for bad debts?

1. a) There is no balance sheet disclosure required – there is only an expense recognized on the income statement.
2. b) The accounts receivable balance is reported gross instead of net
3. c) An allowance for doubtful accounts is added to the balance sheet, which nets against gross accounts receivable. The net accounts receivable under this method represents the estimated balance that will actually be collected.
4. d) Certain customers do not have to pay their balance under this method.