Asked by Mariano Davila III on Jun 10, 2024
Verified
The purpose of reversing entries is to:
A) simplify the recording of certain journal entries in the future.
B) correct an error made in a previous journal entry.
C) ensure that closing entries have been properly posted to the ledger accounts.
D) make certain that only permanent accounts are carried forward into the next accounting period.
E) complete a required step in the accounting cycle.
Accounting Cycle
The process of recognizing, recording, classifying, and summarizing financial transactions in a business over a specific period.
- Familiarize oneself with the intent and practices involved in the development of reversing entries and their implications on record-keeping activities.
Verified Answer
NA
Neema AbrahamJun 12, 2024
Final Answer :
A
Explanation :
Reversing entries are made at the beginning of an accounting period to simplify the recording of certain journal entries in the future. They help to eliminate the need for adjusting entries by reversing the effects of previous entries. This saves time and also helps to ensure that the accruals and deferrals are properly accounted for. Therefore, the best choice is A.
Learning Objectives
- Familiarize oneself with the intent and practices involved in the development of reversing entries and their implications on record-keeping activities.