The allowance method $of$ recognizing bad debt expense $(as$ opposed $to$ the direct write$-$off method$)$ can $be$ applied $in$ more than one way. What two conditions must $be$ met before the allowance method can $be$ used?

Multiple Choice

Bad debts must $be$ consistent over time and the method used $to$ estimate them must $be$ consistently applied.

Bad debts must $be$ expected and material.

Bad debts must $be$ relevant and reliable.

Bad debts must $be$ probable and estimable.