a. Define net realizable value. b. The allowance method of accounting for bad debts may use an income statement or a balance sheet approach. 1. Which approach provides the best estimate of net realizable value? Explain. 2. Working capital is intended to provide a measure of liquidity. Which approach provides a better measure of liquidity? Explain. 3. Which approach is consistent with the matching concept? Explain. 4. Which approach is consistent with the definition of comprehensive income? Explain. 5. Which approach is more consistent with the concept of financial capital maintenance? Explain. 6. Which approach is more consistent with the concept of physical capital maintenance? Explain