What allowance method approach is considered an income statement approach to estimating bad debts?

Question

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The percentage of net credit sales approach is considered an income statement approach because it estimates bad debts based on the amount of credit sales made during the year, which will ultimately affect the company's net income. The other options, percentage of accounts receivable and percentage of accounts written off, are balance sheet approaches, as they estimate bad debts based on the amount of accounts receivable outstanding or the actual accounts that are deemed uncollectible, respectively. The direct write-off method is not considered an allowance method approach, as it does not estimate bad debts but instead waits until a specific account is deemed uncollectible and writes it off as bad debt at that point.

What Allowance Method Approach Is Considered an Income Statement Approach