Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following best describes the Cash Over and Short account in accounting?

It is an income statement account used to record discrepancies between actual cash on hand and the amount recorded in the accounting records.

It is an equity account used to record owner investments in cash.

It is a liability account used to record unpaid cash to suppliers.

It is a balance sheet account used to track petty cash balances.

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Verified step by step guidance

Understand the purpose of the Cash Over and Short account: It is used to record discrepancies between the actual cash on hand and the amount recorded in the accounting records. This typically arises during cash handling processes, such as cash register reconciliations.

Identify the type of account: The Cash Over and Short account is classified as an income statement account because it reflects either a revenue (cash over) or an expense (cash short) resulting from these discrepancies.

Eliminate incorrect options: Review the other options provided in the problem. The Cash Over and Short account is not an equity account, liability account, or balance sheet account, as these classifications do not align with its purpose.

Relate the account to its function: Cash Over and Short accounts are used to ensure that cash discrepancies are properly recorded and accounted for, which helps maintain accurate financial reporting.

Confirm the correct answer: Based on the explanation above, the correct description of the Cash Over and Short account is that it is an income statement account used to record discrepancies between actual cash on hand and the amount recorded in the accounting records.