Which of the following statements relating to reversing entries is correct?
A) Reversing entries are rarely used.
B) Reversing entries are never appropriate for accrual type entries.
C) Depreciation is an adjustment that requires reversing in the subsequent period.
D) There are alternative ways of dealing with the effect of accruals in subsequent periods without using reversing entries.

Question

Quizplus · Accepted Answer

Reversing entries are an optional accounting procedure which may not be used by all accountants, but they offer a way to simplify the recording of transactions in the subsequent period after an accrual or deferral. This means that while reversing entries are a method to handle the effects of accruals, they are not the only method, allowing for alternative approaches to manage these adjustments in subsequent periods.

Which of the Following Statements Relating to Reversing Entries Is