A reversing entry could be used if
A) there is an adjusting entry.
B) the adjusting entry increases an asset or liability account.
C) the adjusting entry account did not have a previous balance.
D) all of these were true.
E) none of these were true.

Question

Quizplus · Accepted Answer

A reversing entry is used to reverse an adjusting entry that was made in the previous accounting period. It is typically used for adjusting entries that were made to increase an asset or liability account. The purpose of the reversing entry is to simplify the accounting process by allowing the original entry to be easily identified and to prevent the double-counting of certain transactions. Therefore, if there is an adjusting entry, it increases an asset or liability account, and the adjusting entry account had a previous balance, a reversing entry should be used.

A Reversing Entry Could Be Used If