7. Debits and Credits for Cash shortage / overage, Petty Cash

Cash Over and Short / Cash Short and Over and Petty Cash

Cash shortage in cash register entry

Debit cash for amount in register, Debit cash over and short for amount under amount it should be, Credit sales for full amount (amount it should be).

For example if records show the amount should be $3,150, but actual cash on hand is $3,142 then we Debit cash 3,142, Debit Cash Over and Short for $8, Credit Sales for $3,150.

Cash overage / surplus in cash register entry

Debit Cash for actual cash in register, Credit Cash Short and Over for amount over the amount of cash that should be in the register, Credit Sales for the amount of cash that should be in the register.

For example, if records show the amount should be $3,000 but the actual cash on hand is $3,010 we would Debit Cash for $3,010, Credit Cash Short and Over for $10, Credit Sales for $3,000.

Establishing a petty cash fund entry

Debit Petty Cash, Credit Cash

Replinishing petty cash for disbursements entry

Debit small expenses separately (such as Supplies expense, Transportation, Office Supplies, Misc. Admin Expense, Postage, etc.), Credit Cash for total amount of expenses

Increase petty cash fund amount (for example if the company feels the amount of money in the petty cash fund is not enough)

Debit Petty Cash, credit Cash.

Decreasing petty cash fund amount

Debit Cash, Credit Petty Cash

Entry to record replenishing petty cash fund but we have a shortage

Debit all relevant expenses separately, Debit Cash Short and Over for amount of shortage, Credit Cash for full amount of accounts debited.