Better Advice, a service company, uses reversing entries. On March 31, they posted the following adjusting entry to accrue utility expenses: Which of the following represents the proper reversing entry to be posted on April 1?

Question

Better Advice, a service company, uses reversing entries. On March 31, they posted the following adjusting entry to accrue utility expenses:  Which of the following represents the proper reversing entry to be posted on April 1?

Quizplus · Accepted Answer

The proper reversing entry for an expense accrual is to debit the expense account and credit the accrued liability account, therefore, the reversing entry should be the opposite. Option A shows a credit to the expense account and a debit to the accrued liability account, which is the correct entry. Option B has debit entries for both accounts, which is incorrect. Option C has the correct accounts but incorrect debit/credit entries. Option D has incorrect accounts and entries.

Better Advice, a Service Company, Uses Reversing Entries