The existing balance in Allowance for Doubtful Accounts is considered in computing bad debt expense in the

A) direct write-off method.
B) percentage of receivables basis.
C) percentage of sales basis.
D) percentage of receivables and percentage of sales basis.

Allowance Account

An account used to record reductions in the book value of accounts receivable due to potential future defaults on payments.

Doubtful Accounts

Doubtful accounts represent receivables that a company is uncertain to collect, typically categorized separately to reflect potential losses.