A reversing entry ________.
A) is required by GAAP
B) is used in conjunction with deferral type adjustments
C) exactly resembles the prior adjusting entry
D) switches the debit and the credit of a previous entry

Question

Quizplus · Accepted Answer

A reversing entry is used to reverse the effect of a previous adjusting entry by switching the debit and the credit. It is typically used in conjunction with accrual type adjustments and is not required by GAAP. The reversing entry is made at the beginning of the next accounting period to ensure that the effect of the adjustment is only recorded in the appropriate period.

A Reversing Entry ________