Question

An employee finds 5,000 dollars on the floor of HKU Inc.’s restaurant space. She puts all the 5,000 dollars in HKU Inc.’s cash register machine. What journal entry would HKU Inc. record over here?

Answer 1

First' of all it's not a cash of company

It is treat as Gain to company

We can pass two possible journal entries both are correct

Cash a/c ------ dr. $5000

To profit/loss. $5000

(Or)

Cash a/c -------dr $5000

To Retain earning $5000

Both entries are same because net effect is same.

Note: Here original we assumed that it's not cash of company but that employee record in books of company that it treat as a Gain.

( Please give LIKE for me it help me very much

Thank you.)