The purpose of reversing entries is to:
A) simplify the recording of certain journal entries in the future.
B) correct an error made in a previous journal entry.
C) ensure that closing entries have been properly posted to the ledger accounts.
D) make certain that only permanent accounts are carried forward into the next accounting period.
E) complete a required step in the accounting cycle.

Question

Quizplus · Accepted Answer

Reversing entries are made at the beginning of an accounting period to simplify the recording of certain journal entries in the future. They help to eliminate the need for adjusting entries by reversing the effects of previous entries. This saves time and also helps to ensure that the accruals and deferrals are properly accounted for. Therefore, the best choice is A.

The Purpose of Reversing Entries Is To