We have some discrepancies in our cash accounts.
What is the correct way to adjust the balance if money was lost/stolen or found?
My immediate solution was to just do an inter account transfer without a recipient account (for money lost/stolen).
I’m terrible at accounting so if possible I would need step by step instructions
Just do a payment from the cash account and charge it to an appropriate expense account eg General Expenses
i do not think that would be proper accounting practice.
i guess another cash account needs to be created and an inter account transfer to the same have to be recorded. just like a clearing account in bank accounts. in case the lost money is found it can be transferred back to the original cash account.
Cash Vs Contingent Expenses (BS Vs P&L through a Payment)
The reason this is not the right approach is that the shortage or overage would just be moved to another asset account without resolving the accounting problem. A shortage or overage must be accounted for as an expense or income.
I looked at that article. Any idea how I actually do this in manager?
What account do I need to add (if any) and how/where do I do the amendment? Is it a journal entry? If so a sample would be great.
Create a new Expense Account if you want to report on the loss separately in your accounts.If not use on of your existing expenses accounts
Then do a payment transaction for the missing amount and select the account where the loss will be expensed - either the new account you created or an existing expense account