Asked by drishika gulati on May 12, 2024
Verified
The use of reversing entries is
A) required.
B) required whenever adjusting entries are omitted.
C) optional.
D) optional unless computerized accounting systems are used.
Reversing Entries
Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.
Adjusting Entries
Bookkeeping adjustments made before the preparation of financial statements to account for accruals and deferrals not recorded through daily transactions.
Optional
Optional refers to a choice or item that is not mandatory and can be selected based on preference or requirement.
- Understand the principle and implementation of reversal entries within the accounting cycle.
Verified Answer
IQ
Ismael QuilesMay 19, 2024
Final Answer :
C
Explanation :
The use of reversing entries is optional. Reversing entries are made to simplify the process of recording the next period's transaction. It is not required by accounting standards or laws, but it is a helpful tool to improve the efficiency and accuracy of accounting processes. The requirement for reversing entries is dependent on the individual company's policies and processes.
Learning Objectives
- Understand the principle and implementation of reversal entries within the accounting cycle.