Reversing entries are prepared to adjust accrued assets and liabilities that were created by adjusting entries at the end of the previous reporting period.

Question

Quizplus · Accepted Answer

Reversing entries are prepared to undo the effect of adjusting entries made at the end of the previous reporting period. This ensures that the accounts reflect the proper balances for the current period and prevents double-counting of amounts carried over from the previous period.

Reversing Entries Are Prepared to Adjust Accrued Assets and Liabilities