The Purpose of Reversing Entries Is To

question 14

Multiple Choice

The purpose of reversing entries is to:

• A) Make certain that only permanent accounts are carried forward into the next accounting period.
• B) Complete a required step in the accounting cycle.
• C) Correct errors made in previous journal entries.
• D) Ensure that closing entries have been properly posted to the ledger accounts.
• E) Simplify a company's recording of certain journal entries in the future.

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Definitions:

National Bank

A type of bank chartered by the federal government and, among other powers, has the ability to issue notes that serve as currency.

Assigned Right

A right that has been transferred from one party (the assignor) to another (the assignee), typically involving rights to receive payments or benefits.

Holder In Due Course

A person who has acquired a negotiable instrument in a legitimate manner and has rights to enforce it free of certain defenses.

Personal Defense

A legal argument or strategy used by an individual to justify actions taken or to protect oneself from criminal or civil liability.