Final answer:
When a bankruptcy debt is reinstated by a court, the debtor's Liabilities account increases due to the renewed obligation to pay the debt, and the Expense account may also increase if additional fees or interests are incurred.
Step-by-step explanation:
When a court reinstates a bankruptcy debt, the two main accounts that are affected on the debtor's financial statements are the Liabilities account and the Expense account.
The Liabilities account is impacted because the reinstatement of the debt means that the debtor now has a renewed legal obligation to pay the debt. This results in an increase in the company's liabilities. On the other hand, the Expense account may also be affected if any additional fees or interest are associated with the reinstated debt, resulting in higher expenses recorded on the profit and loss statement.