Cash Over & Short
What is a Cash Over & Short Account?
A cash over and short account is an expense account used to record any variation in petty cash.
![co1.1](https://seeaccountingnow.online/wp-content/uploads/2021/03/co1.1.jpg)
How it Works
A business will usually keep a small amount of cash on hand for incidental expenses.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co2.jpg)
This is known as petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co3.jpg)
During the month, office staff will use petty cash for such things as incidental office supplies.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co4.jpg)
They may also use it to buy a birthday cake for a staff member.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co5.jpg)
To buy the cake, they take money from petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co6.jpg)
As they do this, they record the disbursement on a petty cash voucher.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co7.jpg)
Then they place the voucher in petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co8.jpg)
At month-end, you sort the vouchers by purpose (See Petty Cash for more on this)
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co9.jpg)
Then you tally the vouchers.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co10.jpg)
This will show how much money was recorded as being taken out of the petty cash draw.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co11.jpg)
Next, you tally the money in petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co12.jpg)
This will show how much money was actually taken out.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co13.jpg)
The total of vouchers should equal the total of cash disbursed.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co14.jpg)
However, there may be a discrepancy.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co15.jpg)
Sometimes, your tallies will indicate more money has come from petty cash than should have.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co16.jpg)
In this case, you have to show that a value has come from petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co17.jpg)
And you are allocating this value to the cash over and short account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co18.jpg)
To record the transaction, you credit the petty cash account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co19.jpg)
This shows you have taken value from petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co20.jpg)
Then you debit the cash over and short account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co21.jpg)
This shows you have allocated the value to that account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co22.jpg)
At other times, your tallies will indicate less money has come from petty cash than should have.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co23.jpg)
In this case, you have to show that a value has come from cash over and short.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co24.jpg)
And you are allocating this value back to the petty cash account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co25.jpg)
To record the transaction, you credit the cash over and short account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co26.jpg)
This shows you are taking value from the account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co27.jpg)
After this, you debit the petty cash account.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co28.jpg)
This shows you are moving value back to petty cash.
![](https://seeaccountingnow.online/wp-content/uploads/2020/04/co28.jpg)
© R.J. Hickman 2020