There are obviously times when you incur an expense, but what if at any given time you\u2019ll be in a position where you would have to reverse the expense. Reversing an expense is something that\u2019s quite a simple and straightforward action in a company\u2019s accounting routine, however since such entries don\u2019t come by as often as the regular expense entry, it\u2019s worthwhile to explain how they would be done.\u00a0<\/p>\n
An expense entry is accounted for by debiting an expense account and crediting either a payable or cash account. Now it has come to your understanding that an entry needs to be either in part or in full reversed. The amount does not matter, but knowing the accounts impacted in general.<\/p>\n
As it is, an expense is reversed by creating an opposite entry on the same expense account you initially recognized the expense on. For an example the initial entry was like this:<\/p>\n
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#<\/strong><\/td>\n| <\/td>\n | Debit-Credit<\/strong><\/td>\n | <\/td>\n | Account name<\/strong><\/td>\n | <\/td>\n | Amount\u00a0<\/strong><\/td>\n | <\/td>\n<\/tr>\n | <\/td>\n<\/tr>\n | 1<\/em><\/td>\n | <\/td>\n | Debit<\/em><\/td>\n | <\/td>\n | Accommodation<\/em><\/td>\n | <\/td>\n | 12,000<\/em><\/td>\n | <\/td>\n<\/tr>\n | <\/td>\n<\/tr>\n | \u00a0<\/em><\/td>\n | <\/td>\n | Credit<\/em><\/td>\n | <\/td>\n | Accounts payable<\/em><\/td>\n | <\/td>\n | 12,000<\/em><\/td>\n | <\/td>\n<\/tr>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n | Now, as it turns out, the expense was in fact 11,000 instead of the initial amount of 12,000 and for the purpose of our example lets presume we\u2019ll not be making the change in the period the initial entry was created, but within the next period. Within the accounting period you\u2019d be making following entry:<\/p>\n
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