---
title: "Reversal entry"
description: "What a reversal entry is, how it cancels a posted journal entry by swapping debits and credits, when to use it and how it differs from an auto-reversing accrual."
canonical: https://ledgeriano.com/glossary/reversal-entry
language: en
publisher: "Ledgeriano"
updated: 2026-11-06
---

# Reversal entry

> What a reversal entry is, how it cancels a posted journal entry by swapping debits and credits, when to use it and how it differs from an auto-reversing accrual.

A reversal entry cancels a posted journal entry by recording the same lines with debits and credits swapped. The original and the reversal stay in the books and are linked, so the net effect is zero while the audit trail stays complete. It is the standard way to correct a posted entry without editing history.

The procedure is simple: reverse the wrong entry in full, then post a new correct entry. Partial corrections are possible with an adjusting entry, but full reversal is clearer for reviewers because the corrected entry can be read on its own.

Choose the reversal date carefully. Reversing on the original date restates that period, which is fine while it is still open. If the period is locked or already reported, reverse in the current period and disclose the correction if it is material. In Ledgeriano, reversing a posted entry creates the linked counter-entry in one step.

Do not confuse corrections with auto-reversing accruals. An accrual booked on 31 March and reversed on 1 April is a planned technique so the real invoice can be booked normally in April; it is not an error correction.

## Example: correcting an expense posted to the wrong account

A 600 software subscription was posted to office supplies. The reversal cancels it; a new entry books it to software expense.

| Entry | Account | Debit | Credit |
| --- | --- | --- | --- |
| Original | Office supplies | 600 |  |
| Original | Bank |  | 600 |
| Reversal | Bank | 600 |  |
| Reversal | Office supplies |  | 600 |
| Correct entry | Software subscriptions | 600 |  |
| Correct entry | Bank |  | 600 |

### Why not just edit the posted entry?

Editing hides what was originally reported. Auditors and tax inspectors expect posted records to be permanent, with every change visible as a new entry.

### Does a reversal need its own number?

Yes. It is a new entry with its own number and date, linked to the entry it reverses.

Guide: https://ledgeriano.com/guides/double-entry-journal-entries