Definition of Reclassify an Amount
To reclassify an amount likely means to move an amount from one general ledger account to another general ledger account.
Example of Reclassifying an Amount
Assume that a company’s accountant recorded a vendor’s invoice for $900 in the account Advertising Expenses. Upon review, the advertising manager informs the accountant that the amount should have been recorded in the account Marketing Supplies. If the accountant uses a journal entry to move the amount, the entry’s description might be: To reclassify $900 from Advertising Expense to Marketing Supplies.
The term reclassify has a gentler tone than the phrase to correct an account coding error.
