What are Reversing Journals in Tally ?
Reversing Journals are special journals that are automatically reversed after a specified date. They exist only till that date and are effective only when called for in reports like the Balance Sheet. These are used in interim reporting in the course of the financial year where accruals are required 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. An example is the provision for depreciation. Depreciation is usually provided for at the end of the year. However, for monthly reporting including it would give a more accurate status.