What Is the Purpose of a Reversing Entry

question 144

Essay

What is the purpose of a reversing entry?

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Definitions:

Revenue

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Quarterly Cash Payments

Regular financial distributions made by a company to its shareholders every three months.

Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on part of the company's assets and earnings.

Regular Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits on a fixed schedule.