Why do you need to re-class a journal entry?

Answer 1

You generally re-class an entry in your financial books if it has been wrongly placed against a certain account. An example of this an expense that was related to a project grant that was classed by your Finance Department on unrestricted dollars. You'd re-class it so you can have the real numbers of expenditures from certain grant lines or financial sources and prevent the misappropriation of disbursements. Hope this answers your question. -A from New York, NY

Answer 2

Journal entries may need to be re-classed if they were originally recorded under the wrong account or if there was a misclassification. Re-classing helps ensure that financial statements accurately reflect the transactions and can provide a more reliable representation of the company's financial position.