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What does a debit balance in the cash short and over account represent? What does a...

What does a debit balance in the cash short and over account represent? What does a credit balance in this account represent?

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Answer #1

Cash Short and Over is an account in which shortages or overages in cash are recorded. It is an income statement account used to record difference between actual cash and expected cash. It is also used to record entries to replenish the petty cash balance.

A debit in Cash Short and Over represents an expense since the account is debited and cash is credited when there is under recorded expense. Similarly a credit balance in Cash short and over means an income.

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