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 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 optional entries made at the beginning of a new accounting period to reverse or cancel out adjusting entries made at the end of the previous period. They simplify the recording of subsequent transactions by eliminating the need for certain adjustments. They can lead to temporary abnormal balances in some accounts, such as having expenses appear as negative amounts until the related expenses are incurred again in the new period.

Reversing Entries