QS 9.4 Distinguish between the allowance method and direct write-off method LO PI , P2 The following list describes aspects of either the allowance method or the direct write-off method to account for bad debts. For each item listed, indicate if the statement best describes either the allowance method or the direct write-off method List Method 1. No attempt is made to predict bad debts expense. 2. Accounts recelvable on the balance sheet is reported at net realizable value 3. The write-off of a specific account does not affect net income 4. When an account is written off, the debit is to bad debts expense s Sales and any bad debt expense are usually not recorded in the same period, thus proper matching (of revenue and expense recognition) does not consistently occur 6 Requires a company to estimate bad debt expense related to the sales recorded in that period