Your Best Advisors,a service company,uses reversing entries.On March 31,2016,they journalized and posted the following adjusting entry to accrue Utilities Expense:

Which of the following entries is the correct reversing entry to be prepared on April 1,2016?

Question

Your Best Advisors,a service company,uses reversing entries.On March 31,2016,they journalized and posted the following adjusting entry to accrue Utilities Expense:

Which of the following entries is the correct reversing entry to be prepared on April 1,2016?

Quizplus · Accepted Answer

The reversing entry should be the exact opposite of the adjusting entry and should be dated for the first day of the next accounting period. In this case, the adjusting entry debited Utilities Expense and credited Utilities Payable, so the reversing entry should credit Utilities Expense and debit Utilities Payable. Option A is the only entry that does this.

Your Best Advisors,a Service Company,uses Reversing Entries