Reversing entries:
A)Are necessary when journal entries have been incorrectly recorded.
B)Are a required step in the accounting cycle.
C)Will often result temporarily in abnormal account balances in some accounts.
D)Are required only if the company uses accounting software to record journal entries.
E)Must be made before preparing the post-closing trial balance.

Question

Quizplus · Accepted Answer

Reversing entries are necessary when there are accruals or deferrals that were recorded in the previous period but will not be needed in the current period. This temporary reversal can result in abnormal balances in certain accounts until the adjusting entries are made in the current period. Reversing entries are not required if the accounting software automatically generates reversing entries. They are also not made before preparing the post-closing trial balance, as they are part of the adjusting entries made in the next accounting period.

Reversing Entries