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 called 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 specifically used to record any discrepancies in petty cash handling, such as cash overages or shortages due to missing receipts or errors in making change. This account is used to adjust the balance in the company's general ledger to match the actual amount of cash on hand.

An Income Statement Account That Is Used to Record Cash