When the direct method is used, an increase in gross accounts receivable is

• added to sales, and a change in the allowance for doubtful accounts is an adjustment to operating expenses.
• added to sales, and a change in the allowance for doubtful accounts is also an adjustment to sales.
• deducted from sales, and a change in the allowance for doubtful accounts is an adjustment to operating expenses.
• deducted from sales, and a change in the allowance for doubtful accounts is also an adjustment to sales.