Style Paragraph expense in the same period that the related credit sales are made. 5. Net realizable value of accounts receivable is the amount the business has collected 6. The expense of extending credit to make a sale should be recognized in the same period as the revenue from the sale. 7. Under the cash basis of accounting, the allowance method is generally required for financial reporting purposes. 8. Under the direct write-off method, the write-off of an account affects the balance sheet and the income statement 9. A company may switch every year from one method of estimating and writing off uncollectibles to another method. 10. The net realizable value of accounts receivable is the amount a company is certain it will be able to collect from its customers. 11. The percentage of sales Inethod is based on the relationship between the amount of accounts receivable at year end and the amount of uncollectible accounts 12. There are no disadvantages to the direct write-off method; therefore, that is the method that most companies use for recording uncollectible accounts. 13. The probability that a customer's account will not be collected usually decreases with the length of time the account has been outstanding 14. The balance in Allowance for Bad Debts prior to adjustment must be taken into account when maicing the current period's adjusting entry using the percentage of sales method. 15. Under the allowance method, the write-off of an account as uncollectible affects the income statement