The debit balance in Cash Short and Over at the end of an accounting period is reported as a. an asset on the balance sheet. b. a liability on the balance sheet. c. an expense on the income statement. d. income on the income statement.

The correct answer is c. an expense on the income statement.

The Cash Short and Over account is used to record discrepancies between the actual amount of cash received and the expected amount of cash per the accounting records (for example, the cash register tape). When there is a shortfall, meaning there is less cash than expected, this is recorded as a debit in the Cash Short and Over account. At the end of the accounting period, if there is a debit balance in this account, it means that there were more shortages than overages during the period.

Debit balances in this account are typically reported as a miscellaneous expense on the income statement. It shows up as a part of the company's overall operating expenses. The reason for this is that a shortage of cash may indicate lost funds, errors, or possibly employee theft – all of which are costs to the business that reduce net income.