REVERSING ENTRIES
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TYPE 1 1) _________ 2) _________ 3)_________
TYPE 1 1. original entry 2. taken directly to a revenue account before revenue is earned 3. before the revenue was earned
why do we use reversing entries? (3 reasons)
1) aid the accounting process 2) most computer systems allow for reversing entries 3) other info: reversing entries are not required
TYPE 2 ACCRUALS
examples: 1) salaries expense 10,000 salaries payable 10,000 2) interest receivable 40,000 interest revenue 40,000
what is a reversing entry?
type of adjusting entry that can be reversed