Final answer:
Under the allowance method, reinstating an account previously written off will cause an increase in the Allowance for Uncollectible Accounts.
Step-by-step explanation:
Under the allowance method, reinstating an account previously written off will cause an increase in the Allowance for Uncollectible Accounts. This is because the allowance method estimates and provides for uncollectible accounts, so when an account is reinstated, it means that it is no longer considered uncollectible and therefore needs to be accounted for in the allowance.
Reinstating a previously written-off account does not increase the Allowance for Uncollectible Accounts; instead, it restores the account and the allowance to their original state, effectively canceling the write-off.
The statement that reinstating an account previously written off will cause an increase in the Allowance for Uncollectible Accounts is false. When an account is reinstated, the company reverses the write-off by debiting the Allowance for Uncollectible Accounts and crediting the Accounts Receivable. This action restores both the account receivable and the allowance to their original amounts before the write-off, decreasing the Accounts Receivable to reflect recovery and increasing the Allowance for Uncollectible Accounts, not the other way around.