{"id":"concept:reversing-entry","kind":"concept","label":"Reversing Entry","synonyms":["reversal","correcting entry"],"definition":"A reversing entry is a new journal entry that mirrors an original one with every line's amount flipped in sign, cancelling its effect while leaving both the mistake and the correction permanently visible.","summary":"The only way to undo a posted entry, since nothing can be edited or deleted. Reversing a $1,200 entry to Rent posts a new entry crediting Rent and debiting Checking by the same $1,200. If it came from a categorized bank transaction, that transaction returns to the inbox ready to be categorized correctly. A reversal can never itself be reversed.","explanation":["BalanceMCP never edits or deletes a posted journal entry — so correcting one means posting a second entry that mirrors the first exactly, with every line's amount flipped. The original stays visible, the reversal stays visible, and anyone looking at the history sees both the mistake and the correction, in order.","If the entry being reversed came from categorizing a bank transaction, reversing it does something extra: that transaction returns to the inbox as unposted, ready to be categorized again — correctly, this time — rather than left stranded. The response names exactly which transaction ids came back. If the entry was a purely manual one, with no bank transaction behind it, the response says so plainly instead.","A reversal can never itself be reversed. Reversing an entry that is itself a reversal is refused outright, because the original reversal already released its transaction back to uncategorized — reversing it again would restore the original mistake's effect while that same transaction sits ready to be categorized a second time, posting the same money twice with nothing in any report able to show it. If a reversal itself turns out to have been the wrong move, the fix is re-categorizing the released transaction correctly, or posting a fresh manual entry, not chaining another reversal.","A reversal can't be dated back into an already-locked period — it needs a date in the currently open period instead, the same principle that governs any new posting. Like every write in BalanceMCP, reversing previews first: exactly what the mirror-image entry would look like, before anything is actually posted."],"commonMistakes":["Trying to reverse a reversal — it's refused by design; the fix for a bad reversal is re-categorizing the released transaction, not chaining another reversal.","Trying to date a reversal back inside an already-locked period — it needs a date in the currently open period instead.","Assuming a reversal deletes the original entry — both the mistake and the correction remain permanently visible in the journal."],"category":"transactions","questions":[{"question":"Does reversing an entry delete it?","answer":"No — nothing deletes a posted entry. Reversing posts a new, mirror-image entry, and both the original and the reversal stay in the ledger permanently."},{"question":"Can I reverse a reversal if I change my mind again?","answer":"No, that's refused by design. Re-categorize the released transaction the way you actually meant it, rather than trying to reverse the reversal itself."}],"url":"/glossary/reversing-entry","relatedTo":[{"id":"concept:journal-entry","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Ajournal-entry"},{"id":"concept:adjusting-entry","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Aadjusting-entry"},{"id":"concept:period-lock","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Aperiod-lock"},{"id":"concept:audit-trail","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Aaudit-trail"},{"id":"concept:bank-transaction","relationship":"related","weight":0.9,"api":"/api/knowledge/concept%3Abank-transaction"},{"id":"guide:correcting-an-ai-mistake-with-a-reversing-entry","relationship":"references","weight":0.7,"api":"/api/knowledge/guide%3Acorrecting-an-ai-mistake-with-a-reversing-entry"},{"id":"tool:reverse_entry","relationship":"references","weight":0.7,"api":"/api/knowledge/tool%3Areverse_entry"}],"referencedBy":[{"id":"concept:journal-entry","label":"Journal Entry","url":"/glossary/journal-entry"},{"id":"concept:posting","label":"Posting","url":"/glossary/posting"},{"id":"concept:audit-trail","label":"Audit Trail","url":"/glossary/audit-trail"},{"id":"concept:refund","label":"Refund","url":"/glossary/refund"},{"id":"concept:memo","label":"Memo","url":"/glossary/memo"},{"id":"concept:closing-the-books","label":"Closing the Books","url":"/glossary/closing-the-books"},{"id":"concept:period-lock","label":"Period Lock","url":"/glossary/period-lock"},{"id":"concept:ai-bookkeeping","label":"AI Bookkeeping","url":"/glossary/ai-bookkeeping"},{"id":"guide:correcting-an-ai-mistake-with-a-reversing-entry","label":"Correcting an AI's Mistake With a Reversing Entry","url":"/guides/correcting-an-ai-mistake-with-a-reversing-entry"},{"id":"tool:reverse_entry","label":"Undo a posted entry the right way","url":"/tools/reverse_entry"}],"license":"https://creativecommons.org/licenses/by/4.0/","attribution":"BalanceMCP — https://balancemcp.com"}