Reversing entry: The reversing entry is that entry which is recorded at the start of an accounting period. This entry is just the reverse of the adjusting entry which is made in the accounting period just before the current accounting period. Most of the reversing entries are made to record the accrued revenue and accrued expenses. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase the balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue, and gains. To decrease the balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue, and gains. To prepare: The reversing entries made on January 1 and the balance of salary and wage expense account.

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Chapter 4, Problem 21Q

(a)

To determine

Reversing entry: The reversing entry is that entry which is recorded at the start of an accounting period. This entry is just the reverse of the adjusting entry which is made in the accounting period just before the current accounting period. Most of the reversing entries are made to record the accrued revenue and accrued expenses.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase the balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue, and gains.

To decrease the balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue, and gains.

To prepare: The reversing entries made on January 1 and the balance of salary and wage expense account.

(b).

To determine

To prepare: The entries and the salary and wages expense account assuming reversing entries are not made.

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