Question

can you explain me the reversing entries?

Answer 1

Revering entries means entries record for cancel or reverse the adjustment journal entries recorded at end of previous accounting period.
As per matching concept, expense recorded when they incurred and matches to generated income during accounting period.
Let's start with practical example.
Generally, utility used in month is paid at next month.
Utilities used in December month will be paid in beginning of January of next year.
For preparation of current year financial statement company made adjustment entries for utilities expense as per matching concept.
Debited to Utility expense and credited to utility payable.
In month of January company made reversing entries when company paid utility bill of December of previous year then reverse the utility payable.
Reversing entries for above transaction is debited to utility payable and credited to cash.

Date	Account title	Debit	Credit
	Adjustment entries
Dec 31	Utility expense	XXX
	Utility payable		XXX
	(To record adjustment of utility expense.)
	Revering entries
When utility bill paid	Utility payable	XXX
	Cash		XXX
	(To record reversal entries of utility payable of December)