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

Question

Quizplus · Accepted Answer

The Cash Over and Short account is used to record any discrepancies arising from petty cash receipts or errors in making change. This account helps to track and reconcile any discrepancies in cash transactions. Option A is incorrect as there is no account called Cash Lost. Option B is incorrect as the Bank Reconciliation account is used to reconcile differences between the cash balance on the bank statement and the company's cash balance. Option C is incorrect as Petty Cash account is used to hold a small amount of cash to pay for minor expenses. Option E is incorrect as Cash Receivable account is used to record amounts owed to the company which are expected to be received in cash.

An Income Statement Account Used to Record Cash Overages and Cash