Cash Over Journal Entry

A cash over normally occurs in a retail accounting environment when the sales are reconciled to the cash receipts in the register at the end of the business day. If the cash in the register is more than the sales there is said to be a cash over. Likewise, if the cash is less than the sales the cash is said to be short.

Cash overages are normally recorded in a separate income statement expense account often referred to as the cash over/short account.

Cash Over Journal Entry Example

Suppose a retail business starts each day with a cash balance of 200 in the cash register. During the day sales of 1,400 are entered into the register, and a cash count at the end of the day shows cash of 1,614 as summarized below.

Cash register reconciliation
Cash count 1,614
Less opening fund 200
Amount banked 1,414
Sales on cash register tape 1,400
Cash over 14

The reconciliation shows that there is a cash over of 14.

To record the cash register overage the business needs to enter the cash over of 14 as part of the journal entry used to record the sales as follows.

Cash over journal entry
Account Debit Credit
Cash 1,414
Cash over/short 14
Sales revenue 1,400
Total 1,414 1,414

The cash overage/shortage account is an expense account in the income statement of the business.

The Accounting Equation

The accounting equation, Assets = Liabilities + Owners Equity means that the total assets of the business are always equal to the total liabilities plus the owners equity of the business. This is true at any time and applies to each transaction.

For this transaction the accounting equation is shown in the following table.

Rent Deposit – Accounting Equation
Assets = Liabilities + Owners Equity
Cash = None + Sales + overage
1,414 = 0 + 1,400 + 14

In this case one balance sheet asset (cash), has been increased by 1,414 when the cash is banked. On the other side of the accounting equation the sales of 1,400 plus the cash register overage of 14 increase the net income, retained earnings, and therefore owners equity in the business by the same amount of 1,414.

Popular mdct.ru Examples

The cash overage journal entry is one of many bookkeeping entries used in accounting, discover another at the links below.

Cash Over Journal Entry May 2nd, 2017Team

You May Also Like


Related pages


annuity factor table excelcredit sales vs accounts receivableexamples of double entry journalsaccounts payable journal entry examplesales returns and allowances definitionoverhead journal entryin a journal entry which is debit and creditcash book template excelis treasury stock a contra accountdefine debitorsdiscounting tables npvreapportionment of overheadshow to calculate bond premium amortizationcommon size balance sheet and income statementgross margin formula excelcalculation for inventory turnsaccounts receivable collection period formulaaccounting clerk practice testjournal entry for credit sales with discountcalculate inventory turnover ratiobank rec formatprojected balance sheet format in excelprepaid rent debit or credituneven cash flow calculatorhow to calculate factory overheaddiscount on note receivablereverse stock split examplebond amortization schedule examplecontra revenue definitionformula for retained earningsinventory systems accountingperiodic and perpetual inventory systemjournal entries for periodic inventory systemperiodic inventory system closing entriesdeferral definition accountingsmall business accounting excel templateimprest balancewhat are consumable suppliesmortgage constant formulaprepaid rent on balance sheethow to compute ending inventoryjournal entries for accrued incomeaccounts ledger templateamortize bond discountdiscount on bonds payable on balance sheetcalculate annuity paymentsaccounts payable entrieswip journal entrymonth end closing journal entries examplesmark up ratiolessor accounting capital leaseprofitability ratios definitiondupont financial analysisaccounts receivable and accounts payable meaningcapital expenditure accounting entryyear end closing entries exampleshow to find variable expensesdifference between trial balance and ledgervariable cost per unit formulaaccounting allowance methoddegree of operating leverage formulaannuity discount factormarkup vs margin chartweighted average ending inventoryfiguring markup percentagecost of merchandise sold definitionasset turnover ratio analysisthe basic accounting equationvariable cost revenue ratiofuture value of an annuity examplewages expense journal entrydefinition garnisheeperiodic and perpetualthe contribution margin income statementbank reconcilationsperpetuity modelvertical analysis of financial statementwhat is grn in inventory