The use of reversing entries
A) is a required step in the accounting cycle.
B) changes the amounts reported in the financial statements.
C) simplifies the recording of subsequent transactions.
D) is required for all adjusting entries.

Question

Quizplus · Accepted Answer

Reversing entries are optional and are used to simplify the recording of subsequent transactions, especially when dealing with accrued revenues or expenses. They are not required in the accounting cycle, do not change the amounts reported in financial statements, and are not necessary for all adjusting entries.

The Use of Reversing Entries