The Cash Over and Short account
A) Is used to record a credit balance in the cash account
B) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts
C) Is not necessary in a computerized accounting system
D) Is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts and is not necessary in a computerized accounting system
E) None of these

Question

Quizplus · Accepted Answer

The Cash Over and Short account is an income statement account used for recording the income effects of cash overages and cash shortages from errors in making change and missing petty cash receipts. It helps in identifying discrepancies in cash handling and the effects of those discrepancies on the company's income. It is not necessary in a computerized accounting system, but it is still an important account to maintain accurate records of cash transactions.

The Cash Over and Short Account