Question: With respect to bad debts, what is the allowance method? Including bad debt expense in the computation of cost of goods sold in the period

With respect to bad debts, what is the allowance method?
Including bad debt expense in the computation of cost of goods sold in the period in which the sale takes place
Including bad debt expense as a subtraction from the sales amount rather than as a separate expense
Estimating and recognizing bad debt expense in the same period in which the associated sale takes place
Recognizing bad debt expense after confirming that a specific customer is not going to pay

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