The cash balance in the books was 86,000 yen, but counting the cash in the safe gave 82,500 yen. The cause is unknown. Which journal entry is correct?
Dr Cash (現金) 3,500 / Cr Cash over and short (現金過不足) 3,500
Dr Cash over and short (現金過不足) 3,500 / Cr Cash (現金) 3,500
Dr Miscellaneous loss (雑損) 3,500 / Cr Cash (現金) 3,500
Dr Cash over and short (現金過不足) 3,500 / Cr Ordinary deposit (普通預金) 3,500
AnswerB. Dr Cash over and short (現金過不足) 3,500 / Cr Cash (現金) 3,500
Actual cash is 3,500 yen less than the books, so we reduce Cash by 3,500 (credit) and debit Cash over and short. Debiting Cash would increase it and widen the gap. Transferring to Miscellaneous loss is done only if the cause is still unknown at year-end, so it is too early now. The shortage is in cash, so reducing the ordinary deposit is wrong.
Q2 | [Entry] Cause of a shortage found
Earlier, a cash shortage of 3,500 yen was recorded as Cash over and short. Later, it was found that 2,800 yen of it was a taxi fare that had not been recorded. Which journal entry is correct?
Dr Travel and transportation expenses (旅費交通費) 2,800 / Cr Cash over and short (現金過不足) 2,800
Dr Travel and transportation expenses (旅費交通費) 2,800 / Cr Cash (現金) 2,800
Dr Cash over and short (現金過不足) 2,800 / Cr Travel and transportation expenses (旅費交通費) 2,800
Dr Travel and transportation expenses (旅費交通費) 3,500 / Cr Cash over and short (現金過不足) 3,500
AnswerA. Dr Travel and transportation expenses (旅費交通費) 2,800 / Cr Cash over and short (現金過不足) 2,800
Cash was already reduced when the shortage was found. Once the cause is known, debit the correct account, Travel and transportation expenses, and credit Cash over and short to clear that part. Crediting Cash would reduce cash twice. Reversing debit and credit would decrease the expense. Only 2,800 yen has been explained, so recording the full 3,500 yen as the expense is wrong.
Q3 | [Entry] Cash over and short at year-end (credit balance)
At year-end, the Cash over and short account has a credit balance of 1,200 yen, and the cause was never found. Which closing adjustment entry is correct?
Dr Miscellaneous loss (雑損) 1,200 / Cr Cash over and short (現金過不足) 1,200
Dr Cash over and short (現金過不足) 1,200 / Cr Cash (現金) 1,200
Dr Cash (現金) 1,200 / Cr Miscellaneous gain (雑益) 1,200
Dr Cash over and short (現金過不足) 1,200 / Cr Miscellaneous gain (雑益) 1,200
AnswerD. Dr Cash over and short (現金過不足) 1,200 / Cr Miscellaneous gain (雑益) 1,200
A credit balance means there was extra cash. Debit Cash over and short to clear it and record the unexplained excess as Miscellaneous gain (revenue). Miscellaneous loss is used for a debit balance (shortage). Cash was already adjusted to the actual amount, so changing Cash now is wrong: crediting Cash reduces it only in the books, and debiting Cash with a credit to Miscellaneous gain increases cash and also leaves Cash over and short uncleared.
Q4 | [Entry] Transfer between bank accounts
The company uses separate accounts named after each bank. It transferred 200,000 yen from its ordinary deposit at Tozai Bank to its current account at Nanboku Bank, and a transfer fee of 330 yen was debited from the Tozai Bank ordinary deposit. Which journal entry is correct?
Dr Current account deposit, Nanboku Bank (当座預金南北銀行) 200,330 / Cr Ordinary deposit, Tozai Bank (普通預金東西銀行) 200,330
Dr Current account deposit, Nanboku Bank (当座預金南北銀行) 200,000, Interest expense (支払利息) 330 / Cr Ordinary deposit, Tozai Bank (普通預金東西銀行) 200,330
Dr Current account deposit, Nanboku Bank (当座預金南北銀行) 200,000, Fees paid (支払手数料) 330 / Cr Ordinary deposit, Tozai Bank (普通預金東西銀行) 200,330
Dr Ordinary deposit, Tozai Bank (普通預金東西銀行) 200,330 / Cr Current account deposit, Nanboku Bank (当座預金南北銀行) 200,000, Fees paid (支払手数料) 330
AnswerC. Dr Current account deposit, Nanboku Bank (当座預金南北銀行) 200,000, Fees paid (支払手数料) 330 / Cr Ordinary deposit, Tozai Bank (普通預金東西銀行) 200,330
The Nanboku Bank current account increases by 200,000 yen (debit) and the Tozai Bank ordinary deposit decreases by 200,330 yen including the fee (credit). The 330 yen fee is Fees paid (an expense). Adding the fee to the current account overstates the Nanboku balance. Interest expense is for interest on borrowings, not transfer fees. The option that debits the Tozai Bank ordinary deposit and credits the Nanboku Bank current account and Fees paid has debit and credit reversed.
Q5 | [Entry] Maturity of a time deposit
A time deposit of 500,000 yen matured and was paid into the ordinary deposit account together with interest of 1,000 yen. Which journal entry is correct? (Ignore taxes.)
Dr Ordinary deposit (普通預金) 501,000 / Cr Time deposit (定期預金) 500,000, Interest income (受取利息) 1,000
Dr Ordinary deposit (普通預金) 501,000 / Cr Time deposit (定期預金) 501,000
Dr Ordinary deposit (普通預金) 501,000 / Cr Time deposit (定期預金) 500,000, Fees received (受取手数料) 1,000
Dr Time deposit (定期預金) 500,000, Interest income (受取利息) 1,000 / Cr Ordinary deposit (普通預金) 501,000
AnswerA. Dr Ordinary deposit (普通預金) 501,000 / Cr Time deposit (定期預金) 500,000, Interest income (受取利息) 1,000
Ordinary deposit increases by 501,000 yen (debit), the 500,000 yen time deposit is removed (credit), and the 1,000 yen interest is Interest income (revenue). Reducing the time deposit by 501,000 removes 1,000 yen that was never deposited and leaves the interest unrecorded. Fees received is for payment for services, not deposit interest. The option that debits Time deposit and Interest income and credits Ordinary deposit is reversed.
Q6 | [Entry] Year-end transfer of a bank overdraft
At year-end, the current account deposit has a credit balance of 45,000 yen (the company has an overdraft agreement with the bank). Which entry transfers this credit balance to the Bank overdraft account?
Dr Bank overdraft (当座借越) 45,000 / Cr Current account deposit (当座預金) 45,000
Dr Current account deposit (当座預金) 45,000 / Cr Ordinary deposit (普通預金) 45,000
Dr Cash (現金) 45,000 / Cr Bank overdraft (当座借越) 45,000
Dr Current account deposit (当座預金) 45,000 / Cr Bank overdraft (当座借越) 45,000
AnswerD. Dr Current account deposit (当座預金) 45,000 / Cr Bank overdraft (当座借越) 45,000
To clear the 45,000 yen credit balance, debit the current account deposit and credit the liability Bank overdraft. The option "Dr Bank overdraft / Cr Current account deposit" is the reverse, which is the re-transfer made at the start of the next period. Reducing the ordinary deposit records a movement of money that did not happen. No cash moved, so debiting Cash is also wrong.
Q7 | [Entry] Petty cash report and replenishment
The company uses the imprest system. At the end of the week, the petty cashier reported payments of communication expenses 4,200 yen, travel and transportation expenses 6,800 yen and supplies 2,500 yen, and the same amount was immediately replenished from the ordinary deposit. Which journal entry is correct?
Dr Communication expenses (通信費) 4,200, Travel and transportation expenses (旅費交通費) 6,800, Supplies expense (消耗品費) 2,500 / Cr Petty cash (小口現金) 13,500
Dr Communication expenses (通信費) 4,200, Travel and transportation expenses (旅費交通費) 6,800, Supplies expense (消耗品費) 2,500 / Cr Ordinary deposit (普通預金) 13,500
AnswerB. Dr Communication expenses (通信費) 4,200, Travel and transportation expenses (旅費交通費) 6,800, Supplies expense (消耗品費) 2,500 / Cr Ordinary deposit (普通預金) 13,500
The report entry (expenses / petty cash) and the replenishment entry (petty cash / ordinary deposit) done together cancel out Petty cash, giving expenses / ordinary deposit. The option that credits Petty cash records only the report, not the replenishment. The option "Dr Petty cash / Cr Ordinary deposit" records only the replenishment, not the expenses. The option that debits everything to Miscellaneous expenses lumps the costs together even though the breakdown is known.
Q8 | [Calc] Cash over and short at year-end
During the year, a cash shortage of 5,000 yen was recorded as Cash over and short. Later it was found that a payment of communication expenses of 3,200 yen and a cash receipt of fees of 1,500 yen had not been recorded. The rest was still unexplained at year-end. Which year-end treatment is correct?
Record a Miscellaneous loss (雑損) of 300 yen
Record a Miscellaneous gain (雑益) of 300 yen
Record a Miscellaneous loss (雑損) of 3,300 yen
Record a Miscellaneous loss (雑損) of 1,800 yen
AnswerC. Record a Miscellaneous loss (雑損) of 3,300 yen
Cash over and short starts with a 5,000 yen debit. The communication expense clears 3,200 yen, leaving a 1,800 yen debit. The unrecorded fee receipt is a reason for having more cash, so the entry is Dr Cash over and short / Cr Fees received 1,500, making the debit balance 1,800 + 1,500 = 3,300 yen, which becomes Miscellaneous loss. 300 yen subtracts the fee the wrong way; a gain of 300 yen also gets the direction wrong; 1,800 yen ignores the unrecorded fee.
Q9 | [Calc] Petty cash replenishment amount
Under the imprest system, the fixed amount is 30,000 yen. This week's payments were transportation 7,400 yen, communication 3,860 yen, supplies 5,200 yen and miscellaneous 1,150 yen. How much is replenished at the end of the week after the report?
17,610 yen
12,390 yen
30,000 yen
47,610 yen
AnswerA. 17,610 yen
Under the imprest system, the amount replenished equals the amount spent: 7,400 + 3,860 + 5,200 + 1,150 = 17,610 yen. 12,390 yen is the cash on hand before replenishment (30,000 − 17,610), not the replenishment. 30,000 yen is the fixed amount itself, and 47,610 yen wrongly adds the payments to the fixed amount. After replenishment the balance returns to 30,000 yen.
Q10 | [Calc] Amount of bank overdraft
The opening balance of the current account deposit was 120,000 yen (debit). During the year, accounts payable of 180,000 yen were paid by transfer from the current account, accounts receivable of 35,000 yen were paid into it, and utilities of 18,000 yen were debited from it. The overdraft limit is 300,000 yen, and there were no other movements. How much is transferred to Bank overdraft at year-end?
25,000 yen
113,000 yen
257,000 yen
43,000 yen
AnswerD. 43,000 yen
120,000 − 180,000 + 35,000 − 18,000 = −43,000 yen, so the current account has a credit balance of 43,000 yen, which is transferred to Bank overdraft. 25,000 yen forgets the utilities debit; 113,000 yen treats the receipt as a decrease; 257,000 yen is the unused part of the limit (300,000 − 43,000), not the amount to transfer.
Q11 | [Read] Closing the cash book
The cash book for October shows: 10/1 balance brought forward, receipt 52,000 yen; 10/8 collection of accounts receivable, receipt 30,000 yen; 10/15 purchase of stationery, payment 4,400 yen; 10/20 deposit into the ordinary deposit, payment 50,000 yen. When closing on 31 October, which entry for "balance carried forward" is correct?
27,600 yen in the receipts column
27,600 yen in the payments column
77,600 yen in the payments column
54,400 yen in the receipts column
AnswerB. 27,600 yen in the payments column
The balance is 52,000 + 30,000 − 4,400 − 50,000 = 27,600 yen. "Balance carried forward" goes in the payments column so that total receipts (82,000) equal total payments (4,400 + 50,000 + 27,600 = 82,000). The receipts column is used for "balance brought forward" at the start of the next month, not for closing. 77,600 yen leaves out the bank deposit, which also reduces cash. 54,400 yen is total payments, not the balance.
Q12 | [Read] Breakdown columns of the petty cash book
This week's payments in the petty cash book are as follows (breakdown column in brackets): 5/10 bus fare 1,320 yen (transportation); 5/11 stamps 840 yen (communication); 5/12 copy paper 2,640 yen (supplies); 5/13 taxi fare 3,100 yen (transportation); 5/14 tea for visitors 960 yen (miscellaneous). In the entry based on the weekend report, how much is recorded as Travel and transportation expenses (旅費交通費)?
1,320 yen
3,100 yen
4,420 yen
8,860 yen
AnswerC. 4,420 yen
The total of the transportation breakdown column becomes Travel and transportation expenses: 1,320 + 3,100 = 4,420 yen. 1,320 yen and 3,100 yen are single items, not the total. 8,860 yen is the total of all payments this week (the replenishment amount), which also includes communication, supplies and miscellaneous.
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