The Accounting Review Vol. 41 No. 1 1966
To Reverse or Not to Reverse?
Abstract
The article discusses the impact and significance of reversing an entry in accounting, as this is a frequently confusing topic in accounting education and examinations. The reversing entry is defined as an entry which cancels a preceding entry. If an entry on either side of an account is followed by a reversing entry, the result of two entries is to leave the account in its original condition. The sequence of entries must be very carefully planned there must exist criteria by which a correct sequence can be constructed. The criteria are that at the end of each sequence balancesheet accounts involved stand at zero and that each individual transaction has been recorded once. These entries may be defined as adjusting entries, closing entries, correcting entries and routine entries. A routine entry, a closing entry, and an entry correcting an error in amount or account are never reversed. Conventionally, reversing entries are conceived as following and canceling an adjusting entry; however, an entry correcting an omission and an adjusting entry may be reversed under some circumstances.
- DOI
- 10.2308/tar-4483003
- Volume
- 41
- Issue
- 1
- Pages
- 138-141
- Language
- en
- Sources
- openalex crossref