CNA L&P - EOY or EOM: Creating a Reversing Journal Entry

Creating a Reversing Journal Entry for Year End or Month End Reporting

In ConnectNow Accounting, you can create a reversing journal entry to make a month-end or a year-end adjustment. For example, you may not have received an invoice but need the amount of the expense to show in your Statement of Activities. By creating a reversing journal entry, you can record the amount of the invoice in one month and automatically reverse it the next. When the invoice is actually received, you can simply enter it.

To create a reversing journal entry, create a journal entry as you normally would, but additionally, check the box to insert a reversing entry.  When you submit the original entry, another new reversing journal entry will display on your screen. 

 

Reversing entries are made on the first day of an accounting period in order to remove certain adjusting entries made in the previous accounting period. Reversing entries are used in order to avoid the double counting of revenues or expenses and to allow for the efficient processing of documents.

The Ledger would then reflect the following entries against the Expense Account

Date Debit Credit  
11/30/2017   100.00 Expense Incurred, no invoice; Journaled
       
12/01/2017 100.00   Reversing Journal Entry
12/25/2017   100.00 Invoice entered or bill paid

The entries against the expense wash each other out in the month in which the invoice was received. The expense is recorded and reported when it is incurred.

Have more questions? Submit a request

Comments

0 comments

Please sign in to leave a comment.