While conducting business, companies routinely buy and sell goods or services on credit or on account. Any money owed to a business by outside entities (people or other firms) is classified as a receivable. Suppose a business sells merchandise or provides services for which a formal, written instrument of credit is issued (usually due between 60 days and one year from the sale). Such transactions are classified as and can be found on the balance sheet classified as Businesses offer credit to customers in order to facilitate sales. The risk, however, is that some customers may not pay the amount they owe. Such accounts are said to be uncollectible. To reduce their risk of uncollectible receivables, some firms sell the rights to their accounts receivable for immediate cash. This is called factoring receivables. If a firm assumes the risk of collecting its own receivables, there are two methods of accounting for uncollectible receivables: the allowance method and the direct write-off method. Identify the method consistent with each description in the following table