Answer :
Answer:
Credit to Cash Overage for $5,500
Explanation:
Revenue total is $120,500 so the revenue will be recorded by this amount and the cash is $126,000 so it will also recorded by the same amount. An additional credit entry will be placed to reflect the effect of this transaction.
The journal entry to record the day's sales would include
Debit Cash $126,000
Credit Cash Overage $5,500
Credit Sales $120,500
Answer:
credit to Cash Overage for $5,500.
Explanation:
When sales are made and cash is received, the normal entries to be passed are a debit to cash and a corresponding credit to sales revenue to recognise the revenue earned from sales.
However when there is an overage in cash the excess funds are moved to an overage account pending resolution of the discrepancy. When the error is identified reversal entries are passed to assign finds to correct source. If however the error cannot be detected the amount is considered an income.
The overage in this case is 126,000- 120,500= $5,500
So the entry to be passed is
Credit Cash Overage $5,500
Note Cash Overage is an income account.