A method of estimating uncollectible accounts that emphasizes asset valuation rather than income measurement is the allowance method based on

 A method of estimating uncollectible accounts that emphasizes asset valuation rather than income measurement is the allowance method based on
Aging the receivables. Correct
Direct write-off.
Gross sales.
Credit sales less returns and allowances.
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The aging of receivables method of estimating uncollectible accounts is based on the theory that bad debts are a function of accounts receivable collections during the period. The aging of receivables method emphasizes reporting accounts receivable at their net realizable value. It is a balance-sheet approach, which stresses the collectibility (valuation) of the receivable balance. Once the balance of the allowance account required to reduce net accounts receivable to their realizable value has been computed, bad debts expense is merely the amount needed to adjust the allowance account to the computed balance.