what is the journal entry for cash embezzled by an employee Rs. 2000?
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When there is a report of cash embezzlement by an employee, there are 2 ways of recording it as a journal entry.
1. When the Embezzled Cash is considered as a Loss by the Organization or firm, the journal entry will be –
Loss by Theft of Cash A/c Dr 2000/-
or
Cash Embezzlement A/c Dr 2000/-
To Cash A/c 2000/-
2. When the Embezzled Cash is not considered as a loss for the firm but has been embezzled by an individual. The employee is held responsible for the cash embezzled and the amount is recovered from the employee.
Employee’s Personal A/c
Loss by Theft Dr 2000/-
To Cash A/c 2000/-
(Cash Embezzled recovered from the employee)
1. When the Embezzled Cash is considered as a Loss by the Organization or firm, the journal entry will be –
Loss by Theft of Cash A/c Dr 2000/-
or
Cash Embezzlement A/c Dr 2000/-
To Cash A/c 2000/-
2. When the Embezzled Cash is not considered as a loss for the firm but has been embezzled by an individual. The employee is held responsible for the cash embezzled and the amount is recovered from the employee.
Employee’s Personal A/c
Loss by Theft Dr 2000/-
To Cash A/c 2000/-
(Cash Embezzled recovered from the employee)
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