Which of the following statements is true?
A) reversing entries are compulsory.
B) all accruals must be reversed.
C) reversing entries are optional and are only made to simplify the recording process at the start of the new accounting period.
D) reversing entries are made on the last day of the financial year.

Question

Quizplus · Accepted Answer

Reversing entries are optional and are only made to simplify the recording process at the start of the new accounting period. They are not compulsory and not all accruals need to be reversed. They are typically made on the first day of the new accounting period, not the last day of the financial year.

Which of the Following Statements Is True