The balance of Allowance for Doubtful Accounts prior to recording the end of year adjusting entry to record Bad Debt Expense equals the Bad Debt Expense to be recorded on the income statement equals the Bad Debt Expense to be recorded as a year-end adjusting entry. O is relevant when using the direct write-off method. is relevant when using the percentage-of-receivables basis. will never show a debit balance at this stage in the accounting cycle