Author Question: A debit journal entry to the cash short and over account is used to record a cash shortage. a. True ... (Read 70 times)

bio_gurl · **on:** Jul 5, 2018

A debit journal entry to the cash short and over account is used to record a cash shortage.
a. True
b. False
Indicate whether the statement is true or false

Question 2

How is net income calculated and on what financial statement(s) is it reported?

What will be an ideal response?

jazzlynnnnn · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

True

Answer to Question 2

Net income is calculated by matching all expenses incurred during a given accounting period with all revenues earned during that same period. Thus, net income is based on the accrual basis of accounting. Net income is reported on the income statement and the statement of changes in shareholders' equity.