Reversing entries and their purpose

What this note covers

1. What are reversing entries and why do they exist?
2. The accounting cycle and when reversing entries are prepared
3. Reversing entries for accrued expenses: mechanics and worked example
4. Reversing entries for accrued revenues: mechanics and worked example
5. How reversing entries prevent double-counting under accrual accounting
6. Ledger account tracing: the full effect across periods
7. Common examination scenarios and GST considerations

7 sections · 12 key terms & formulas · 6 common mistakes