Checking Accounts And Banking Flashcards


Petty cash is a current asset and should be listed as a debit on the company balance sheet. To initially fund a petty cash account, the accountant should write a check made out to “Petty Cash” for the desired amount of cash to keep on hand and then cash the check at the company’s bank. The journal entry on the balance sheet should list a debit to the business bank account and a credit to the petty cash account. When petty cash is used for business expenses, the appropriate expense account — such as office supplies or employee reimbursement — should be expensed.

You borrow 100 shares of the Widget Company from an investment firm and sell them to another investor for $100 a share (a total of $10,000). Taking the short position is a useful tool in the arsenal of any serious stock buyer. Once you learn how it is used, you can leverage it to earn some money when you think that a stock is overvalued and due for a serious dip in price per share. You may have heard about short-selling, shorting or short position when listening toinvestmentdiscussions, but maybe you weren’t quite sure of the meaning. Taking a short position is essentially the opposite of investing in a company.

  • Some companies use a voucher system, which essentially works the same way as the log.
  • If there’s a shortage or overage, a journal line entry is recorded to an over/short account.
  • The recipient signs the voucher for the money and brings back a receipt and change.
  • If the petty cash fund is over, a credit is entered to represent a gain.
  • Record the the amount of cash given, to whom and why on the voucher.

If there’s a shortage or overage, a journal line entry is recorded to an over/short cash short and over account. If the petty cash fund is over, a credit is entered to represent a gain.

Cashier Accountability

When you invest in a company, you’re betting that the price of the shares will go up, giving you positive wealth growth. When you take a short position, you’re betting that the price of a company’s stock is going to go down.

What is petty cash float?

Businesses generally keep small amounts of cash to meet small miscellaneous payments such as entertainment expenses and stationery costs. Such payments are generally handled by a petty cash imprest system whereby an amount of ‘Float’ is fixed. This is the maximum amount of cash that can be held at any time.

When there is not enough money in the checking account to pay a check. Complete the Cash Float Form and submit along with a copy of the completed internal cash receipts deposit form to Accounting Services as noted above.

cash short and over

Instead, it is aggregated with the other cash accounts of a business into a single cash line item; this form of presentation is known as a classified balance sheet. This should be small enough that employees won’t be tempted to steal it but large enough that you don’t have to replenish it too often.

cash short and over

Format Of The Petty Cash Book:

Interest will vary depending on the type of capital obtained and the borrower’s credit history. Capital is used to provide ongoing production of goods and services for creating profit. Companies use capital to invest in all kinds of things for the purpose of creating value for a firm.


The Financial Services Department will process the payment, and inform the originating department of the account number that has been assigned to the fund. For more information on completing the cash float form, refer to the instructions. If the appropriate disposition of the excess amount of cash cannot be determined, the excess should be deposited to a departmental cash short and over account through the Cashier, Financial Services Department. Since petty cash register does not form part of the double entry system, payments made through petty cash are subsequently posted into the cash ledger and the general ledger. If everything adds up and you’re simply burning through petty cash regularly, evaluate your spending and look for areas to cut.

If the petty cash fund is short, a debit is entered to represent a loss. The over or short account is used to force-balance the fund upon reconciliation. A petty cash fund is a small amount of cash kept on hand to pay for minor expenses, such as office supplies cash short and over or reimbursements. A petty cash fund will undergo periodic reconciliations, with transactions also recorded on the financial statements. There might be a petty cash fund, which can be a drawer or box, in each department for larger corporations.

The company is more likely to do this if it seems unlikely that the stock price will go back down below the price at which you sold it. The Widget Company misses its target, sending the stocks into a dive — just like you’d predicted. You then buy 100 shares at $75 a share (a total of $7,500) and give those shares back to the investment company. Here’s an example of how taking a short position on a stock could work for an average investor. Let’s say you think that The Widget Company is overvalued and will see a big stock price drop after it reports its earnings next week.

True Explanation These are typical adjustments to the bank balance. Which of the following statements accurately describes a fidelity bond? Multiple Choice Procedures to provide reasonable assurance that the objectives of a company are accomplished. Insurance that the company buys to protect itself from loss due to employee dishonesty. Guidelines or policies that limit the actions of different levels of management.

False Explanation Financial audits are not directed toward the discovery of fraud. Auditors are, however, responsible for cash short and over providing reasonable assurance that statements are free from material misstatements, whether caused by errors or fraud.

Cash equivalents are investments securities that are meant for short-term investing; they have high credit quality and are highly liquid. Leave profits in the business to produce retained earnings that can used as reserves for capital investment.

cash short and over

Petty cash is a small amount of cash on hand used for paying expenses too small to merit writing a check. A bank to record daily differences between a teller’s actual cash at the end of the day versus the expected amount of cash based on checks cashed, deposits received, etc. The ________ uses the remittance advices to record the journal entries to Cash and customer accounts. Bank service charges are subtracted from the book balance for a bank reconciliation.

On the next line, subtract the balance amount from the opening balance to keep a running total of the amount in petty cash. On the back of the receipt, write the person’s name and the account from the chart of accounts to which you will charge the purchase.

What Is Capital?

Instead of buying the stock at a low price and hoping to sell it at a higher price, you sell it at a high price and hope to buy it later at a lower price. You’ll then buy more stock later at a lower price to give back to the company. The risk is that the stock price may go up, forcing you to buy the return stock at a higher price. Put more simply, investors take a short position when they think the price of a stock is going to go down. They take a long position when they think the price of a stock is going to go up.

If you don’t think DIY stock-picking is for you, find a financial advisor to help you out. SmartAsset can help you find one with our free financial advisor matching service. You answer a few questions and we match you with up the three advisors in your area.

A code to access money from an ATM or to make purchases using a debit card. Complete an Internal Cash Receipts Deposit Form and submit along with the cash in the amount of the fund to the Cashiers Office, Financial Services Department. Any transaction to restore a fund shortage should be so identified and approved under the signature of the head of the department. Deposit cash float funds promptly with the Cashier, Financial Services Department, when no longer required.

At this time, the total of all of the receipts is calculated to ensure that it matches the disbursed funds from the petty cash drawer. If new funds are cash short and over needed, the cashier writes a new check to fund the petty cash drawer and takes, in exchange, the receipts from the purchases that depleted the cash.


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