If a cashier rang up sales totaling $5,098, but had $5,105 to deposit, which journal entry would be recorded?
A debit to Cash for $5,105 a credit to Cash Overage for $7 and a credit to Sales Revenue for $5,098.
A debit to Sales for $5,105 a debit to Cash Overage for $7 and a credit to Cash for $5,098
A debit to Cash for $5,098 a debit to Cash Shortage for $7 and a credit to Sales Revenue for $5,105.
A debit to Cash for $5,098 a debit to Cash Shortage for $7 and a credit to Unearned Revenue for $5,105.
To determine the correct journal entry for this situation, we need to understand the concepts of cash overage and cash shortage.
Cash overage refers to excess cash received compared to what should have been collected. On the other hand, cash shortage refers to a deficit in the cash received compared to the amount that should have been collected.
In this scenario, the cashier collected $5,098 in sales but had $5,105 to deposit, indicating a cash overage of $7. Therefore, we need to record a journal entry that accounts for this discrepancy.
The correct journal entry would be:
A debit to Cash for $5,105 (to reflect the actual amount received)
A credit to Sales Revenue for $5,098 (to account for the correct sales amount)
A credit to Cash Overage for $7 (to record the excess cash collected)
Therefore, the correct answer is:
A debit to Cash for $5,105, a credit to Sales Revenue for $5,098, and a credit to Cash Overage for $7.