Reversing Journals are special journals that are automatically reversed after a specified date. They exist only till that date
and are effective only when they are included in reports. These are used in interim reporting in the course of the financial
year where accruals are to be reported. These accruals are usually short term and are cleared in the subsequent period.
However, to get a proper perspective, decision makers require the reports with full impact of all aspects and transactions.
To activate Reversing Journals,
Go to Gateway of Tally
Select F11: F1: Accounting Feature
Set Use Reversing Journals & Optional Vouchers? to Yes.
Accept the screen to save.
You may use reversion journal for accounting for or providing for depreciation. Since, depreciation is usually provided
during at the end of the year, using the Reversing journal you may include them for monthly reporting or a specific period
to give more accurate status or position.
Let us take an example:
On 30th June you want to view the Balance Sheet but June month’s rent is not been paid. You may create a Scenario
(refer Scenario Management for more information) and pass a Reversing Journal entry to view the reports which will be
effective up to the applicable date. When you view the Balance Sheet, Tally.ERP 9 displays the report with the reversing
journals included. The voucher affects the report only for that day, 30th June.