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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Entry for cash sales; cash short

The actual cash received from cash sales was $18,371, and the amount indicated by the cash register total was $18,400. Journalize the entry to record the cash receipts and cash sales.

To determine

Petty cash fund: Petty cash fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches. In day-to-day life, it becomes difficult to use checks for daily expenses. Therefore, companies maintain some minimum amount of funds in the hand for such daily expenses. These funds are called as petty cash funds. These funds are managed by custodian. This system is otherwise called as imprest system.

To journalize: Record cash receipts and cash sales.

Explanation
Petty Cash is an asset and is increased by $18,371. Cash short and over is the account debited when there is a missing petty cash. Therefore, debit Cash Short and Over account with missing amount of $12. Sales has been made and it increases the equity value. So, credit Sales account with $18,400.

Cash short is determined as the difference between sales and cash...

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