The Purpose of Reversing Entries Is To

question 145

Multiple Choice

The purpose of reversing entries is to:

• A) simplify the recording of certain journal entries in the future.
• B) correct an error made in a previous journal entry.
• C) ensure that closing entries have been properly posted to the ledger accounts.
• D) make certain that only permanent accounts are carried forward into the next accounting period.
• E) complete a required step in the accounting cycle.

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Definitions:

Social Exchange Process

A theory that explains social change and stability as a process of negotiated exchanges between parties.

Expectancy Theory

A motivational theory suggesting that an individual's behavior is determined by their expected outcomes or rewards.

Interaction

The process by which entities communicate and influence each other's behavior.

Stock Certificates

Physical documents that represent ownership of shares in a corporation, indicating the number of shares owned by the shareholder.