Make a reversing journal entry

How can I make reversing journal entry?

The quickest way is to View journal entry you want to reverse. Click Clone button, change the date and copy&paste debit amounts into credit column and credit amounts into debit column. So the new journal entry is basically reversing the original one on different day.

an auto reversing entry would be very helpful, can we please get this feature?

no, journal entries are meant for manual and thoughtful input

I think it may be useful for accrued and deferred incomes/expenses at the closing of the year. Although it would be more useful if Manager could automatically calculate the accruing values at closing by assigning each revenue/expense the corresponding period at the input.

Hi, I attached a screenshot of Peachtree’s journal entry window where you could see it has a feature for the user to tick mark if he wants the journal entry to reverse in the next accounting period. I believe Peachtree added this feature because they had in mind that though journal entries are manual inputs, auto reversing certain journal entries would also save time to the user not to mention saving him from the trouble of forgetting to reverse later on.

Please for your consideration.

Thank you.



1 Like

Hi Lubos,
it will be more easier if there is an option to input the journal number which i wish to reverse and tick image then update and it will auto reversed.

Since it is a perpetual accounting software you can only have a “reverse copy” function.

Why don’t you clone the transaction and edit the debit and credit fields and set it into the future by giving it a future date?

I don’t think that setting a future transaction without a pending functionality is a good idea. It will enhance the possibility of errors. And also, in many country, it is even illegal.

How is setting a journal entry to reverse at a future date different from another entry to do a reversal in the future date?

There is completely no difference. In fact what I am saying that inserting any kind of active" future transaction in an kind of accounting software, under my point of view, is not a good practice.

A completely different thing is if you have something like sales orders where you can leave an accounting as a memo and clone it when it is effective. I have already asked for something that I called Journal Notes but it was not of interest for @lubos.

Journals for accruals and deferrals (e.g. Accrued interest, prepayments) are adjustments that are made after period end and posted into the previous period and reversed in the current period. The reversal is usually dated the first day of the current period. As the reversals are dated in the current period they are not entered with a future date. These entries are required to fulfill the concept of accrual accounting in its strictest form. This practice is used by most large companies (and has been for many years as it was done when I worked in the banking industry in the 1970’s) to meet proper disclosure requirements so it is not illegal and in fact best practice in terms of accrual accounting.

Come on, don’t try to make controversy for free… one day after is not future. And then, please tell me, based on your experience, when you happened to account accrued or prepaid transaction before the ending of a fiscal period.

Actually @Davide, processing accruals at period ends is a very common practice when the system doesn’t automatically recognize/amortize prepaid items.

In fact, unless you have this process automated, this is the best practice to handle prepaid items because it keeps your balance sheet clean at all times.

However, I can see how auto-reversal might be an overkill because it is only a once per period exercise that doesn’t justify the costs of automation.

Imo, a simple reverse button in the view menu of journal entries where you can just enter the date would answer most of OP’s needs, if @dalco agrees with me.

I agree that a “reverse copy” is the easiest and best solution.

No one is trying to make controversy. A forum is a place where controversial matters are discussed. One forum member puts forward a viewpoint and another forum member puts forward a different viewpoint which may happen to be contrary to the other forum members viewpoint.

You are stating that it is not possible to have an Auto Reverse journal in a perpetual accounting system as it would produce an “active” future transaction that may be illegal in some countries. I am supporting the request for Auto Reverse Journal functionality because, if used correctly, it does not result in an “active” future transaction. The reason being, as I explained in my previous post, is that these journals are entered after period end and so don’t result in an “active” future transaction.

Sure, we we would run the recurring auto reverse journals mid month as these were fixed amounts that did not change month to month. However, as the system was not a perpetual system, the reverse part of the transaction only became active on closing the previous month and opening the current month.

Although more time consuming “reverse copy” functionality would be a satisfactory alternative.