Which adjustment would never require a reversing entry?
A) Income received in advance (cash received originally recorded in an income account)
B) Accrued wages
C) Prepaid rent
D) Depreciation

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense and does not involve any cash transactions. Therefore, it does not require a reversing entry. A reversing entry is needed for adjusting entries that involve prepayments, accruals, or other temporary accounts that need to be reversed in the next accounting period.

Which Adjustment Would Never Require a Reversing Entry