Cash short by rs 25000

1. cash adjustment (if consider as loss)

Loss of cash A/c            Dr     xxxx

      To Cash A/c                                     xxxx

2. loss of cash charged to profit and loss a/c

Profit and loss A/c        Dr.       xxxx

      To Loss of Cash a/c                        xxxx

Unless the cash is stolen or lost and proper FIR is lodged with the police, the deduction for Rs 250000/- may not be allowed for tax purposes. If the claim is bonafide and that there is unimpeachable evidence to support the actual loss then the deduction should be claimed for loss of cash.

The reasons for getting short cash should be analysed for eg, accounting expenses at a date earlier than actual payment, taking cash loans, depositing cash lying at home (due to demonetization), sales/ other receipts short accounted etc.