Using the balance sheet approach, bad debt expense is an indirect result of estimating the appropriate balance for the allowance for uncollectible accounts.

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The balance sheet approach to accounting for bad debts requires estimation of the appropriate balance for the allowance for uncollectible accounts. This, in turn, affects the calculation of bad debt expense, which is an indirect result of the allowance balance.

Using the Balance Sheet Approach, Bad Debt Expense Is an Indirect