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Reversal of Prior Month Accrual

Clearing out a month-end estimate at the beginning of the next period to avoid double counting.

Account NameTypeDebit ($)Credit ($)
Accrued LiabilitiesLiability (-)500.00-
Utilities ExpenseExpense (-)-500.00

💡 Accountant's Note

Reversing entries are used at the start of a new month so that when the 'actual' bill arrives and is recorded, the net effect on expenses is correct.

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QA

Expert Analysis by Qusai Ahmad

General Accountant Supervisor & IFRS Specialist

Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.

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