What is a Reversing Entry?

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Offline hassan

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What is a Reversing Entry?
« on: March 29, 2019, 01:52:57 AM »
Reversing entries, or reversing journal entries, are journal entries made at the beginning of an accounting period to reverse or cancel out adjusting journal entries made at the end of the previous accounting period. This is the last step in the accounting cycle.

Reversing entries are made because previous year accruals and prepayments will be paid off or used during the new year and no longer need to be recorded as liabilities and assets. These entries are optional depending on whether or not there are adjusting journal entries that need to be reversed.
Md. Arif Hassan
Assistant Professor &
Associate Head
Department of Business Administration
Faculty of Business and Economics
Daffodil International University