Reversing entry
In accounting, reversing entry means an entry dated the first day of the next period that exactly offsets a period-end accrual, so the real invoice can be coded normally without double-counting.
- Layer
- Lexicon
- Defined in
- Lexicon
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Not a rule
Bookkeeping mechanic — not codified. US GAAP governs recognition, measurement and presentation — not the mechanics a bookkeeper uses to get there. Anyone citing a standard for this word is citing the wrong thing.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
The lesson that teaches this
Accounting, 0 to 1 — a free course taught end to end on one month of one company, with the spreadsheet exercises to work it yourself.
Reversing entry, in use
Quoted from the document that use the word — what it does to an interface, in the spec's own sentence.
A posted entry gets a reversing entry with its own number and date; the original stays exactly as it was.
How to build a general ledger table in React — 4. Posted entries are reversed, never edited
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- How to pay vendors: ACH vs wire vs check vs cardACH, wire, check or card: what each payment rail costs, how long it takes, where the fraud risk sits, and how each payment is recorded in the books.
- Accrued expenses vs accounts payable: the differenceAP is a bill you’ve received; an accrued expense is a cost incurred before the bill arrives. When to accrue, and how reversing entries work, by example.
What it is not called
Each of these is a real word for a different thing. Using it here is what makes a product read as though it was built by someone who has not done the work.
- undo
- auto-delete
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
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Work with this concept
The calculators that compute it and the ledger payloads that carry it. A definition is where a reader starts; these are where they go next.
- Reversal vs reversing entryA reversal is a new entry that cancels a posted entry that was wrong, leaving both in the ledger; a reversing entry is a planned reversal of a month-end accrual on the first day of the next period, so the real bill can be booked normally.Compare
- Journal entry for accrued expensesAt month-end, debit the expense and credit Accrued expenses for work received but not yet billed. Reverse the accrual on the first day of the next month, then book the vendor's bill as usual when it arrives.Entry
- Journal entry for accrued wagesAt month-end, debit Wages and salaries and credit Accrued wages for the days worked since the last payday. On payday, reverse the accrual or debit Accrued wages for the part of the payroll it covers.Entry
Defined in Lexicon. This page is generated from that document, so the two cannot disagree.