What do you mean by reversing journal entries?

 


Reversing Journals are special journals that are automatically reversed after a specified date. They exist only till that date and are effective only when they are included in reports.  These are used in interim reporting in the course of the financial year where accruals are to be reported. These accruals are usually short term and are cleared in the subsequent period. However, to get a proper perspective, decision makers require the reports with full impact of all aspects and transactions.

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