Study

Indicate whether each statement best describes the allowance method or$,$ the direct write$-$off method.

$\backslash$table$[[$List$,],[1.$ Usually does not best match sales and expenses because Bad Debts Expense is not recorded until an account,$],[$becomes uncollectible, which usually occurs in a period after the credit sale.,$],[2.$ When an account is written off, the debit is to Bad Debts Expense.,$],[3.$ Does not predict Bad Debts Expense.,$],[4.$ Accounts receivable on the balance sheet is reported at net realizable value.,$],[5.$ Estimates Bad Debts Expense related to the sales recorded in that period.,$],[6.$ Matches the estimated loss from uncollectible accounts receivable against the sales they helped create.,$]]$