Reversing entries overcome the disadvantage of more complex entries to pay accrued liabilities and collect accrued receivables from the previous accounting period.

Question

Quizplus · Accepted Answer

Reversing entries are entries that are made at the beginning of a new accounting period to reverse the effects of certain adjusting entries made in the previous period, such as accrued liabilities and receivables. This helps simplify the entries needed to record these transactions in the current period.

Reversing Entries Overcome the Disadvantage of More Complex Entries to Pay