Concept explainers
Journalize the difference between cash count and cash reported on cash register.
Explanation of Solution
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
Journalize the difference between cash count and cash reported on cash register.
Transaction on April 1:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
April | 1 | Cash | 385.50 | |||
Cash Short and Over | 1.25 | |||||
Income from Services | 386.75 | |||||
(Record cash shortage in the revenue earned) |
Table (1)
Description:
- Cash is asset account. Since the cash collected from sales revenue is recorded, the asset value increased. So, debit the cash account with $385.50.
- Cash Short and Over is an income statement (expense or revenue) account. The increase (overage) is credited and recorded as Revenue, and decrease (shortage) is debited and recorded as Expense. Hence, debit Cash Short and Over account with $1.25 indicating an expense.
- Income from Services is a revenue account. Revenues increase the stockholders’ equity value. So, credit Income from Services account with $386.75, indicating an increase in stockholders’ equity.
Working Note:
Compute the cash short and over amount.
Transaction on April 2:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
April | 2 | Cash | 585.75 | |||
Income from Services | 582.65 | |||||
Cash Short and Over | 3.10 | |||||
(Record cash overage in the revenue earned) |
Table (2)
Description:
- Cash is asset account. Since the cash collected from sales revenue is recorded, the asset value increased. So, debit the cash account with $585.75.
- Cash Short and Over is an income statement (expense or revenue) account. The increase (overage) is credited and recorded as Revenue, and decrease (shortage) is debited and recorded as Expense. Hence, credit Cash Short and Over account with $3.10 indicating revenue.
- Income from Services is a revenue account. Revenues increase the stockholders’ equity value. So, credit Income from Services account with $582.65, indicating an increase in stockholders’ equity.
Working Note:
Compute the cash short and over amount.
Transaction on April 3:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
April | 3 | Cash | 585.75 | |||
Cash Short and Over | 0.90 | |||||
Income from Services | 586.65 | |||||
(Record cash shortage in the revenue earned) |
Table (1)
Description:
- Cash is asset account. Since the cash collected from sales revenue is recorded, the asset value increased. So, debit the cash account with $585.75.
- Cash short and over is an income statement (expense or revenue) account. The increase (overage) is credited and recorded as Revenue, and decrease (shortage) is debited and recorded as Expense. Hence, debit Cash Short and Over account with $0.90 indicating an expense.
- Income from Services is a revenue account. Revenues increase the stockholders’ equity value. So, credit Income from Services account with $586.65, indicating an increase in stockholders’ equity.
Working Note 1:
Compute the cash short and over amount.
Transaction on April 4:
Date | Account Titles and Explanations | Post. Ref. | Debit ($) | Credit ($) | ||
April | 4 | Cash | 626.15 | |||
Income from Services | 623.25 | |||||
Cash Short and Over | 2.90 | |||||
(Record cash overage in the revenue earned) |
Description:
- Cash is asset account. Since the cash collected from sales revenue is recorded, the asset value increased. So, debit the cash account with $626.15.
- Cash Short and Over is an income statement (expense or revenue) account. The increase (overage) is credited and recorded as Revenue, and decrease (shortage) is debited and recorded as Expense. Hence, credit Cash Short and Over account with $2.90 indicating revenue.
- Income from Services is a revenue account. Revenues increase the stockholders’ equity value. So, credit Income from Services account with $623.25, indicating an increase in stockholders’ equity.
Working Note:
Compute the cash short and over amount.
Want to see more full solutions like this?
Chapter 6 Solutions
College Accounting (Book Only): A Career Approach
- Catherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardOn May 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions: A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $80. C. On June 23, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93. D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000. E. On June 30, the petty cash fund needed replenishment as it was month-end. The following are the receipts: Auto Expense $114, Supplies $75, Postage Expense $50, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.arrow_forwardOn September 1, French company has decided to initiate a petty cash fund in the amount of $800. Prepare journal entries for the following transactions: A. On September 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $37, Supplies $124, Postage Expense $270, Repairs and Maintenance Expense $168, Miscellaneous Expense $149. The cash on hand at this time was $48. B. On September 14, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $18, Supplies $175, Postage Expense $50, Repairs and Maintenance Expense $269, Miscellaneous Expense $59. The cash on hand at this time was $210. C. On September 23, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $251, Supplies $88, Postage Expense $63, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $20. D. On September 29, the company determined that the petty cash fund needed to be increased to $1,000. E. On September 30, the petty cash fund needed replenishment as it was month end. The following are the receipts: Auto Expense $18, Supplies $15, Postage Expense $57, Repairs and Maintenance Expense $49, Miscellaneous Expense $29. The cash on hand at this time was $837.arrow_forward
- On June 1 French company has decided to initiate a petty cash fund in the amount of $800. Prepare journal entries for the following transactions: A. On June 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $37, Supplies $124, Postage Expense $270, Repairs and Maintenance Expense $168, Miscellaneous Expense $149. The cash on hand at this time was $48. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $18, Supplies $175, Postage Expense $50, Repairs and Maintenance Expense $269, Miscellaneous Expense $59. The cash on hand at this time was $220. C. On June 23, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $251, Supplies $88, Postage Expense $63, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $20. D. On June 29, the company determined that the petty cash fund needed to be increased to $1,000. E. On June 30, the petty cash fund needed replenishment, as it was month end. The following are the receipts: Auto Expense $18, Supplies $175, Postage Expense $50, Repairs and Maintenance Expense $269, Miscellaneous Expense $59. The cash on hand at this time was $437.arrow_forwardOn July 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions: A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $110. C. On June 23, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93. D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000. E. On June 30, the petty cash fund needed replenishment, as it was month end. The following are the receipts: Auto Expense $14, Supplies $75, Postage Expense $150, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
- Survey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage LearningExcel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning