Where does lost/found cash fit into a double-entry bookkeeping system?
They’re not expenses or income, since you should have already recorded them when the original money came in (thus, already recording the income) and if you’re keeping track of your finances, then to record an expense would be to overstate expenditures (since you didn’t actually spend it on anything.) When something like this happened in a business, they do one of two things. In restaurants and many retail stores, for example, they often keep a separate account called “cash over/short”. At the end of each shift, any extra or short in the drawer (up to a point, after which a short drawer will likely come out of an employee’s pay) is recorded in this account. At the end of the reporting period, it’s usually evened itself out for the most part, but sometimes there is a bit of a balance. It gets closed into P&L just like other income and expense accounts do, even though it’s not technically either. The other option is to close any losses/finds directly into equity when they occur. If this d
