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(Russian, storno, from Italian storno, bookkeeping transfer), a bookkeeping procedure generally intended to rectify an incorrect entry.
Only one kind of adjusting entry is customarily used—the reversing entry, a supplementary entry in which the same absolute number is kept but the sign is reversed, in order to correct an error. The incorrect entry is thus canceled. The numbers reversed are usually written in red ink so that they will stand out; thus, reversing entries are sometimes known as red-ink entries. A partial adjusting entry can also be used; here, the original error is not canceled but merely altered.
In making an adjusting entry, it is necessary that reference be made to the entries being corrected or adjusted.