The reversing entry for accrued interest income would include a debit to
A) Income Summary.
B) Interest Expense.
C) Interest Income.
D) Interest Receivable.

Question

Quizplus · Accepted Answer

DReversing entries are made at the beginning of a new accounting period to reverse the effects of certain adjusting entries made at the end of the previous period. Accrued interest income would have been recorded as Interest Receivable (an asset) and Interest Income (revenue) at the end of the previous period. To reverse this, you would debit Interest Income (to decrease revenue) and credit Interest Receivable (to decrease the asset).

The Reversing Entry for Accrued Interest Income Would Include a Debit