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What is a Cash Short and Over account?
A Cash Short and Over account is a financial account used to track discrepancies between actual cash on hand and the expected cash balance in a business. When cash received is less than expected, it is recorded as a "cash short," while any excess cash is recorded as "cash over." This account helps businesses identify and manage cash handling errors, theft, or other issues affecting cash flow. It is typically used in retail and hospitality settings where cash transactions are frequent.
What is the usual balance of the account Cash Short and Over?
debit
Correct entry to replenish petty cash?
Typically, a company would write a check in the amount needed to bring the petty cash box back to the imprest amount. So, if the petty cash account has a balance of $200, but there is only $50 in cash in the petty cash box, they would write a check for $150...usually to the Office Manager or whoever is responsible for petty cash. The debit side of the entry is to the various expense accounts supported by the receipts or vouchers in the box: postage expense, office expense, misc. expense, etc. Of course, the credit side of the entry is to cash. The only time you ever make an entry to an imprest petty cash account is when you first set it up, or if you increase or decrease the imprest amount. In the example above, if the receipts in the box did not total $150, you would still write the check for $150 and have an entry to an expense account called cash over/short.
A 100 petty cash fund has cash of 18 and receipts of 80 The journal entry to replenish the account would include what?
receipts 80 Cash Short(Over) 2 Cash 82
Why a decrease in current asset is added to the cash flow statement?
There are a few reasons that vary based on the current asset you're referring to. If its a prepaid expense that's been decreased you've generally increased an expense. Like if you have prepaid insurance it may be amortized to expense over the year. So this expense flows into cash flows through the net income amount. But you haven't paid cash for this expense it was merely reducing prepaid expense from the prior year. So it gets added to cash flows. If its account receivable that's being reduced it means in general you've received cash from your customer. But that amount is not included in net income as it was probably income and a receivable the year before. So you have to add it to cash.
What is a Cash Short and Over account?
A Cash Short and Over account is a financial account used to track discrepancies between actual cash on hand and the expected cash balance in a business. When cash received is less than expected, it is recorded as a "cash short," while any excess cash is recorded as "cash over." This account helps businesses identify and manage cash handling errors, theft, or other issues affecting cash flow. It is typically used in retail and hospitality settings where cash transactions are frequent.
What is the usual balance of the account Cash Short and Over?
debit
Amount of cash overages for a period exceeds the amount of cash shortages the balance in the account cash short and over will be?
credit
Correct entry to replenish petty cash?
Typically, a company would write a check in the amount needed to bring the petty cash box back to the imprest amount. So, if the petty cash account has a balance of $200, but there is only $50 in cash in the petty cash box, they would write a check for $150...usually to the Office Manager or whoever is responsible for petty cash. The debit side of the entry is to the various expense accounts supported by the receipts or vouchers in the box: postage expense, office expense, misc. expense, etc. Of course, the credit side of the entry is to cash. The only time you ever make an entry to an imprest petty cash account is when you first set it up, or if you increase or decrease the imprest amount. In the example above, if the receipts in the box did not total $150, you would still write the check for $150 and have an entry to an expense account called cash over/short.
A 100 petty cash fund has cash of 18 and receipts of 80 The journal entry to replenish the account would include what?
receipts 80 Cash Short(Over) 2 Cash 82
Why a decrease in current asset is added to the cash flow statement?
There are a few reasons that vary based on the current asset you're referring to. If its a prepaid expense that's been decreased you've generally increased an expense. Like if you have prepaid insurance it may be amortized to expense over the year. So this expense flows into cash flows through the net income amount. But you haven't paid cash for this expense it was merely reducing prepaid expense from the prior year. So it gets added to cash flows. If its account receivable that's being reduced it means in general you've received cash from your customer. But that amount is not included in net income as it was probably income and a receivable the year before. So you have to add it to cash.
What is the difference between a cash payment and a payment made to a vendor or contractor through AP and why is one better than the other?
The difference between a cash payment and a payment made to a vendor or contractor through accounts payable is as follows: In a cash payment, the company using the services of the vendor immediately recognizes the expense (by increasing the expense account) and hand over the cash to the vendor (by decreasing the cash asset account). For the vendor, they recognize the revenue upon completion (by increasing the revenue account) and move the cash onto their balance sheet (by increasing the cash asset account). In an accounts payable transaction, the company using the services of the vendor immediately recognizes the expense (by increasing the expense account) and acknowledges the debt (by increasing the accounts payable liability). For the vendor, they recognize the sale (by increasing the revenue account) and acknowledges that the company using their services owes them for the work that they did (by increasing the accounts receivable account). Time eventually passes for the accounts payable transaction and the company that used the services of the vendor sends payment to the vendor (by decreasing the cash account) and acknowledges that the debt is paid (by reducing the accounts payable liability). The vendor receives payment in the mail (by increasing the cash asset account) and acknowledges that the debt is paid (by reducing the accounts receivable asset). The key difference is which party is providing the cash flow. For a cash payment, the transaction is best for the vendor because they are receiving cash immediately. For an AP transaction, the service user is better because they held onto cash for some period of time.
What is a prepaid expense account called?
A prepaid expense account is typically referred to as a "prepaid expense" or "prepaid asset." This account represents payments made in advance for goods or services that will be received in the future. As the benefits of these expenses are realized over time, they are gradually expensed on the income statement.
Where is cash over and short?
"Cash over and short" is an accounting term used to describe discrepancies between the actual cash on hand and the expected cash amount in a cash register or cash drawer. If there is more cash than expected, it is considered "cash over," while if there is less, it is termed "cash short." These discrepancies can arise from errors in transactions, counting mistakes, or theft. Businesses often track these amounts to identify patterns and improve cash management.
What cash flow?
Cash flow is revenue or expenses stream that changes a cash account over or given period.
How does depreciation expense difference from other operating expenses?
Operating Expenses are the cost of doing business and are paid out of the company's cash or in some cases paid with Bonds, Stocks, or Dividends, either way, these expense will affect the Cash of the company and it's worth. Their are two accounts for Depreciation one is Accumulated Depreciation. This is an Contra-Asset Account and is listed on the Balance Sheet under assets and is deducted from the related asset account. Depreciation Expense is the expense we claim from Accumulated Depreciation and though it is an expense it does not affect our Cash. We do not actually "pay" this expense. Depreciation is the decline in usefulness of a Fixed Asset. Remember, all Fixed Assets (except Land) lose their usefulness. Decreases in the usefulness of assets that are used in generating revenue are recorded as expenses. However, such decreases for fixed assets are difficult to measure. For this reason, a portion of the cost of the fixed asset is recorded as an expense each year for its useful life.
If you have over accrued a liability on the books Which would be an appropriate entry to remedy the situation?
debit cash, credit expense
