ACC 280 WEEK 3 DQ 4 - Week 3 What are reversing entries?...

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Week 3 What are reversing entries? Why are reversing entries needed? What would be the impact if not made? What are the pros and cons of using reversing entries? What types of transactions may require reversing entries?
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What are reversing entries? Reversing entries are an optional accounting procedure which may prove useful in simplifying record keeping. A reversing entry is a journal entry to "undo" an adjusting entry. Reversing entries are often made at the very beginning of a new accounting period to cancel or undo an adjusting entry that was made in the prior period. Why are reversing entries needed? Reversing entries are often needed to simply the accounting procedures in the new accounting period. For example, let's say that salaries were accrued at the end of the last accounting period. When the first payroll is paid this year, it is much easier to reverse the prior year accrual entry and go on to record payroll as it is usually recorded all during the year.
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This note was uploaded on 11/21/2011 for the course ACC 280 280 taught by Professor Lindaking during the Spring '10 term at University of Phoenix.

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ACC 280 WEEK 3 DQ 4 - Week 3 What are reversing entries?...

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