Number of Pages: 1 (Double Spaced)Writing Style:
APANumber of sources: 2
? What are the pros and cons of using reversing entries?
? Why are reversing entries optional?
Format your paragraph consistent with APA guidelines.
What are the pros and cons of using reversing entries? Why are reversing entries optional?
Reversing entries are an optional accounting procedure which are used to reverse the adjusting entries at the beginning of the next accounting cycle.
Some of the pros and cons of reversing entries are:
Pro: It helps in simplifying the accounting process and can be useful for new and less knowledgeable accounting staff.
The companies following cash basis can get rid of accruals if they use reversing entries.
Con: Reversing entries can be confusing to accounting staff because they are backwards entries. Sometimes it is easier to not use reversing entries while waiting until the end of year two to make new accrual entries.