A customer paid $16.50 for merchandise with a twenty dollar bill. The sales person gave incorrect change of $4.50 to the customer. At the end of the day the cash register showed total sales receipts of $285. Based on this information, the journal entry to record sales and correct the error would be:

Question

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When the sales person gave $4.50 in change instead of $3.50, it created a shortage of $1.00. At the end of the day, the company will report sales revenue of $285.00, but will only have $284.00 of cash on hand, with a $1.00 shortage. The correct journal entry is a debit (increase) to cash of $284, a debit to cash short or over (short) of $1, and a credit (increase) to sales revenue of $285.

A Customer Paid $16