A Company Had $43 Missing from Petty Cash Which Was

question 107

Multiple Choice

A company had $43 missing from petty cash which was not accounted for by petty cash receipts.The correct procedure is to:

• A)Debit Cash Over and Short for $43.
• B)Credit Cash Over and Short for $43.
• C)Debit Petty Cash for $43.
• D)Credit Petty Cash for $43.
• E)Credit Cash for $43.

Identify and differentiate between types of expenses and their recognition.

Understand the necessity and types of adjusting entries in accounting.

Know the criteria for revenue recognition under different bases (accrual and cash) and in different scenarios.

Distinguish between different cost categorizations and the implications for financial reporting.

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Definitions:

Retained Earnings

The portion of a company's profit that is held back and not distributed to shareholders as dividends, to be reinvested in the business or used to pay off debt.

Contractual Loan Restrictions

Clauses in a loan agreement that limit the borrower's actions in certain ways to reduce the lender's risk.

Preferred Dividends

Payments made to preferred shareholders before any dividends are distributed to common shareholders, often at a fixed rate and with priority over common dividends.

Retained Earnings

The portion of a company's profits not distributed as dividends to shareholders, but rather reinvested in the business or held as reserves.