You’ve just been hired as an accountant at Murdstone, Inc., a retailer of supplies for arts and crafts. Since the previous accountant left his position suddenly, the controller of Murdstone, Inc. has asked for your assistance in filling in some missing data for the company’s January accounting records. You’ll also be responsible for training the company’s new accounting intern.

Cash Short and Over

The controller has completed the T accounts for the cash and sales accounts as of January 30, but needs to attend an important conference in another city. She has requested that you prepare the T account for the cash short and over account as of January 30 also. You are told that the balance of the account is zero as of the beginning of January, and that all the company’s sales are in cash. To simplify, this problem assumes that a company has only one bank account, which is identified in the Ledger as “Cash.”

Review the following T accounts, and then scroll down to complete the cash short and over T account and answer the associated question that follows it.

Cash
Balance 1/1	5,500	1/2 Establish Petty Cash	500
1/5	2,850
1/12	6,230
1/23	3,270
1/30	4,450
Balance	21,800

Sales
		Balance 1/1	0
		1/5	2,855
		1/12	6,200
		1/23	3,300
		1/30	4,380
		Balance	16,735

Review the preceding T accounts, and then complete the cash short and over T account and associated question that follows it.

Cash Short and Over
Balance 1/1	0	1/12 =
1/5 =		1/30 =
1/23 =
		Balance=

What will happen to the ending balance in the cash short and over account at the end of the accounting period?
=It will be added to the Other Income section of the income statement.

Answer rating: 100% (QA)

Solution Cash short or over Balance 11 0 112 62006230 30 ... View the full answer