Accounting & Bookkeeping & Small Business Forum

[Maliks]

how to record cash sale transacyion in general journal,if u have cash short $2,sale=19880.77,sales tax payable=1192.85,bank credit card expense=540.95
and
if u have cashover then how it is recorded

[dp1903]

Quote: ="Maliks"]how to record cash sale transacyion in general journal,if u have cash short $2,sale=19880.77,sales tax payable=1192.85,bank credit card expense=540.95
and
if u have cashover then how it is recorded

This is a bit complicated. I'll try and explain, but you may need to refer to the link below. This is where I am drawing my info. from. If you still need more help, I would contact a QuickBooks ProAdvisor in your area.

http://www.sleeter.com/newsletters/dec2000

For Cash short/over, you'll need to create two two new accounts. Click the Accnt button on the Icon Bar to open the Chart of Accounts list.
Press CTRL-N to create a new account.
In the New Account window, select an account type of Income.
Name the account "Over".
Click Next and repeat the processes, naming the account "Short".

Now you need items to use for these overages and shortages.
Click the Item button on the Icon Bar to open the Item List.
Prest CTRL-N to create a new item.
Create a non-inventory part item named "Overage".
Don't assign a price and make it non-taxable.
Link it to the account named Over you just created.
Click Next to create another new, non-inventory part item.
Name this item "Short" and link it to the account named Short.
Click OK to close the Item List Window.

When using these items, remember to use a minus sign before the figure if you're using the Short item.

To handle tracking of each type of payment, create "Payment" items for each payment type. If you accept MasterCard, Visa, American Express, or other credit card payments you'll want to setup a payment item for each of them. Contrary to what the link above shows, on the Edit Item window I would check "Group with other undeposited funds". That way, when you find out on what date the funds were deposited to checking from each credit card you can then go to "Make Deposits" and select the funds to be deposited to checking so that it will match your bank statement. In addition, for checks and cash I would also select "Group with other undeposited funds" so that you can match what is on your daily deposit slip.

After you've set up the payment items, create a custom Invoice template similar to what is shown in the link above. Name the Invoice template "Daily Sales Summary" or other term you prefer.

At the end of each day, create a transaction summarizing the day's sales. Create an Invoice using the "Daily Sales Summary" template. I'm using your numbers below. I'm going to assume you had $15,000 in American Express credit card sales, all taxable, with sales tax of $750 and the remainder of sales in checks all of which were also taxable. The entries on the Invoice would look like this:

___ITEM__________________DESCRIPTION__________RATE______AMOUNT
Sales_____________________Sales_______________19,880.77___19,880.77
AMEX_____________________AmericanExpress___-15,750.00__-15,750.00
Checks___________________ChecksReceived____-5,321.62___-5,321.62
Short_____________________Cash Short___________-2.00_______-2.00

_________________________________Sales Tax_____________1,192.85



Total funds to be received are $19,880.77 in sales, plus $1,192.85 in sales tax for a total of $21,073.62. Funds actually received are $15,750 from American Express and $5,321.62 in checks. That leaves you $2 short which is recorded to the short account.

Sales tax is set up so that it is automatically recorded at the bottom of the Invoice on the "Tax" line by calculating the taxable sales times the tax rate.

When this invoice is recorded all the items are properly recorded.

When you write up your deposit for the day it's going to be only the checks received which is $5,321.62. Go to "Make Deposits" and check that deposit iitem for deposit and make the deposit for the day.
When you find out the date American Express deposited the $15,750 less the $540.95 in service fees, go to "Make Deposits" again and check the $15,750 item for deposit. On the next line under "From Account" select your Bankcard fees expense account, Payment Method = American Express, and enter the $540.95 as a negative amount. Then record the deposit.

Now the transaction is complete, your checking account always shows exactly how much cash you actually have and your sales tax account will be correct.

[RobJ]

Maliks wrote: how to record cash sale transacyion in general journal,if u have cash short $2,sale=19880.77,sales tax payable=1192.85,bank credit card expense=540.95
and
if u have cashover then how it is recorded
Is this a foreign currency transaction? If not, is this a one-time thing or does this happen often?

Rob

[Maliks]

Thanks alot for ur help

[irsfixer]

dp1903 wrote: Quote: ="Maliks"]how to record cash sale transacyion in general journal,if u have cash short $2,sale=19880.77,sales tax payable=1192.85,bank credit card expense=540.95
and
if u have cashover then how it is recorded

This is a bit complicated. I'll try and explain, but you may need to refer to the link below. This is where I am drawing my info. from. If you still need more help, I would contact a QuickBooks ProAdvisor in your area.

http://www.sleeter.com/newsletters/dec2000

For Cash short/over, you'll need to create two two new accounts. Click the Accnt button on the Icon Bar to open the Chart of Accounts list.
Press CTRL-N to create a new account.
In the New Account window, select an account type of Income.
Name the account "Over".
Click Next and repeat the processes, naming the account "Short".

Now you need items to use for these overages and shortages.
Click the Item button on the Icon Bar to open the Item List.
Prest CTRL-N to create a new item.
Create a non-inventory part item named "Overage".
Don't assign a price and make it non-taxable.
Link it to the account named Over you just created.
Click Next to create another new, non-inventory part item.
Name this item "Short" and link it to the account named Short.
Click OK to close the Item List Window.

When using these items, remember to use a minus sign before the figure if you're using the Short item.

To handle tracking of each type of payment, create "Payment" items for each payment type. If you accept MasterCard, Visa, American Express, or other credit card payments you'll want to setup a payment item for each of them. Contrary to what the link above shows, on the Edit Item window I would check "Group with other undeposited funds". That way, when you find out on what date the funds were deposited to checking from each credit card you can then go to "Make Deposits" and select the funds to be deposited to checking so that it will match your bank statement. In addition, for checks and cash I would also select "Group with other undeposited funds" so that you can match what is on your daily deposit slip.

After you've set up the payment items, create a custom Invoice template similar to what is shown in the link above. Name the Invoice template "Daily Sales Summary" or other term you prefer.

At the end of each day, create a transaction summarizing the day's sales. Create an Invoice using the "Daily Sales Summary" template. I'm using your numbers below. I'm going to assume you had $15,000 in American Express credit card sales, all taxable, with sales tax of $750 and the remainder of sales in checks all of which were also taxable. The entries on the Invoice would look like this:

___ITEM__________________DESCRIPTION__________RATE______AMOUNT
Sales_____________________Sales_______________19,880.77___19,880.77
AMEX_____________________AmericanExpress___-15,750.00__-15,750.00
Checks___________________ChecksReceived____-5,321.62___-5,321.62
Short_____________________Cash Short___________-2.00_______-2.00

_________________________________Sales Tax_____________1,192.85



Total funds to be received are $19,880.77 in sales, plus $1,192.85 in sales tax for a total of $21,073.62. Funds actually received are $15,750 from American Express and $5,321.62 in checks. That leaves you $2 short which is recorded to the short account.

Sales tax is set up so that it is automatically recorded at the bottom of the Invoice on the "Tax" line by calculating the taxable sales times the tax rate.

When this invoice is recorded all the items are properly recorded.

When you write up your deposit for the day it's going to be only the checks received which is $5,321.62. Go to "Make Deposits" and check that deposit iitem for deposit and make the deposit for the day.
When you find out the date American Express deposited the $15,750 less the $540.95 in service fees, go to "Make Deposits" again and check the $15,750 item for deposit. On the next line under "From Account" select your Bankcard fees expense account, Payment Method = American Express, and enter the $540.95 as a negative amount. Then record the deposit.

Now the transaction is complete, your checking account always shows exactly how much cash you actually have and your sales tax account will be correct.

Good lord, set up one account called Cash Over/Short and reclass the balance as needed at the end of the year.

[dp1903]

Quote: Good lord, set up one account called Cash Over/Short and reclass the balance as needed at the end of the year.

That part of my post came out of a QuickBooks book. Separate accounts will make it easier to identify if a dishonest employee is taking cash from the till. Cash short and over should average out to about even over time. If your cash short account is large in comparison to your cash over account someone is probably stealing funds. This is not as easy to identify with one account without doing analysis.

[irsfixer]

dp1903 wrote: Quote: Good lord, set up one account called Cash Over/Short and reclass the balance as needed at the end of the year.

That part of my post came out of a QuickBooks book. Separate accounts will make it easier to identify if a dishonest employee is taking cash from the till. Cash short and over should average out to about even over time. If your cash short account is large in comparison to your cash over account someone is probably stealing funds. This is not as easy to identify with one account without doing analysis.
\
Of course that is not true. If someone is stealing, the balance will continue to grow. If you set up the account as a current asset, a growing credit balance will provide instant notification of a problem. Running the g/l will help isolate it.

[dp1903]

You are right as far as the balance continuing to grow. As I said, I took it out of a QB book. My thought was to create one account as well. But, I give the benefit of the doubt to the folks who are the experts. However, this is recording cash sales. The cash over/short account or accounts should be income or expense accounts, in my opinion, not an asset account. Cash over is income, cash short is an expense, money not collected from the sale.

[irsfixer]

dp1903 wrote: You are right as far as the balance continuing to grow. As I said, I took it out of a QB book. My thought was to create one account as well. But, I give the benefit of the doubt to the folks who are the experts. However, this is recording cash sales. The cash over/short account or accounts should be income or expense accounts, in my opinion, not an asset account. Cash over is income, cash short is an expense, money not collected from the sale.

It is a suspense account until the year end. It is then reclassified as income or expense depending on the balance.

[dp1903]

Is there a FASB statement or guideline on this or is this your own method of classification?

I don't see that it makes much difference whether it's classified as income or expense as long as it shows up as one or the other for the period in which the transaction took place. But, with the transaction presented here using your classification, the asset cash short/over would have to be debited when in fact you were short of cash, not long. Doesn't make sense to increase an asset when you actually lost money and the income or expense is not reported on interim financial statements using this method. I don't see the logic to classify it as an asset.

[RobJ]

irsfixer wrote: Good lord, set up one account called Cash Over/Short and reclass the balance as needed at the end of the year.
I applaud dp1903 for trying to help. Considering the circumstances and the lack of information from the OP, I think you're splitting hairs on this one.

Rob

[Maliks]

Thanx guys