A primary difference between the direct write-off and allowance methods is whether or not bad debt is based on a percentage of sales.

Name: A primary difference between the direct write-off and allowance methods is whether or not bad debt is based on a percentage of sales.
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The primary difference is when bad debts are recognized: the direct write-off method recognizes them when they are deemed uncollectible, while the allowance method estimates them in advance.

A Primary Difference Between the Direct Write-Off and Allowance Methods