Assume that you are concerned with the account balances reported on an entity's balance sheet, more so than the amounts reported in the income statement. When it comes time to estimating bad debts, theoretically the better approach to meet your needs as a user of the financial statements would be to have the entity estimate bad debts based on:
A. the total sales both cash and credit
B. the total credit sales
C. the outstanding accounts receivable balance
D. the direct write-off method