Question

An income statement account that is used to record cash overages and cash shortages arising
from omitted petty cash receipts and from errors in making change is titled the:_______
A) Bank Reconciliation account.
B) Petty Cash account.
C) Cash Over and Short account.
D) Cash Receivable account.
E) Cash Lost account.

Answer 1

Answer:

C) Cash Over and Short account.

Explanation:

Cash Over and Short account also known as cash over short account is an income statement account where shortages or overages in petty cash handling are recorded. There are cases where amount received or the balance at hand is more than the petty cash ledger balance, that is called cash overage but if the reverse is the case, it is called cash shortage. Any cash shortage or overage must as a matter of rule be recorded in the books of account created for that purpose.