Chapter 4, Problem E4A.27E

To determine

Introduction: Generally accepted accounting principle does not require reversing entries. Reversing entries are used for accrual type adjustments. They are made on the first day of an accounting period to reverse the adjusting entries made in the previous accounting period. It is made to avoid doubling of revenues or expenses. When an accountant reverses an entry, it saves his time and he does not have to refer back to the previous period for the accounting entry.

Requirement 1:

To Calculate:

1. The T-accounts of unadjusted balances on December 31^st 2016

To determine

Requirement 2:

To Calculate:

Without reversing entries.

To determine

Requirement 3:

To Calculate:

The T-accounts of unadjusted balances at December 31^st 2016, assuming that Ocean View Services uses reversing entries