A reversing entry is ________.
A) a journal entry used to close the temporary accounts after preparation of financial statements
B) a special journal entry used to make the adjustments that took place after preparing the trial balance
C) a special journal entry that eases the burden of accounting for transactions in the next period
D) a journal entry prepared at the end of an accounting period to match assets with liabilities

Question

Quizplus · Accepted Answer

A reversing entry is a special type of journal entry that is prepared at the beginning of the next accounting period to reverse the effect of certain adjusting entries made in the previous period. This eases the burden of accounting for transactions in the new period by eliminating the need to remember to reverse the original entry manually. Reversing entries are typically used for accruals and deferrals.

A Reversing Entry Is ________