Under the allowance method of accounting for bad debts,the company estimates the amount of bad debt expense before those debts actually occur.

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In the allowance method, the company estimates the amount of bad debt expense based on past experience and current economic conditions before specific debts are identified as uncollectible. This allows for better matching of expenses to revenues and a more accurate portrayal of the company's financial position.

Under the Allowance Method of Accounting for Bad Debts,the Company