Final answer:
A debit balance in the Cash Over and Short account indeed represents an expense and is included in the miscellaneous expenses on the income statement.
Step-by-step explanation:
The statement that a debit balance in the Cash Over and Short account reflects an expense and is reported on the income statement as part of miscellaneous expenses is True. The Cash Over and Short account is used in accounting to record the discrepancies between the actual amount of cash received and the expected amount as per the accounting records.
When there is a shortage (cash received is less than expected), the account is debited and this debit balance is reported as an expense because it represents a loss or an expense incurred by the business. On the contrary, if there is an overage (cash received is more than expected), the account is credited and the credit balance is treated as revenue.