Here are two examples that convey my question:
#1 Cash ATM withdrawal & deposit in one expense account:
- Business cash withdrawal of (-$1000) to purchase equipment is made to petty cash (expense).
- Only $100 was spent, so (+$900) was deposited back to petty cash (expense); leaving -$100 balance.
- Cash expense of $100 is added for equipment purchase; petty cash (expense) is now $0 (balanced).
#2
Bank charges (expense). Bank provides me a $50 credit to reverse a fee charged to me over the telephone. Is this income or is it reducing the bank charges (expense) account?
