A reversing entry

A) reverses entries that were made in error.
B) is the exact opposite of an adjusting entry made in a previous period.
C) is made when a business disposes of an asset it previously purchased.
D) is made when a company sustains a loss in one period and reverses the effect with a profit in the next period.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.

Reversing Entry

An entry, made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period.

Disposes

Acts of transferring ownership or getting rid of assets, including selling, discarding, or recycling them.