A company collects cash from a customer after it had written off the account as uncollectible. The company needs to make a journal entry to reinstate the customer's account using the allowance method. Which entry should be recorded?

This entry incorrectly suggests that the company recognizes a new expense, which is not needed when reinstating a previously written-off account. Instead, the allowance account should be credited, not the bad debt expense, since the expense has already been recorded during the initial write-off.

This option incorrectly credits bad debt expense, implying that there is a current loss associated with the reinstatement of the account. However, the correct approach is to adjust the allowance account rather than recognize an additional bad debt expense, as the loss has already been accounted for.

This entry reverses the write-off in the wrong order. While it does correctly debit the allowance account, it should credit accounts receivable instead of debiting it. This option incorrectly implies that the account is being written off again rather than reinstated.