The Cash Over and Short account: Multiple Choice a. Can never have a debit balance. Can never have a credit balance. b. Is used when the cash account reports a credit balance. c. Is used to record the income effects of errors in making change and/or processing petty cash transactions. d. Is not necessary in a computerized accounting system.

Question

Jaylene Sexton

Business

7 May, 15:44

The Cash Over and Short account: Multiple Choice a. Can never have a debit balance. Can never have a credit balance. b. Is used when the cash account reports a credit balance. c. Is used to record the income effects of errors in making change and/or processing petty cash transactions. d. Is not necessary in a computerized accounting system.

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Answers (1)

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Barajas · Answer 1

The correct answer is letter "C": Is used to record the income effects of errors in making change and/or processing petty cash transactions.

Explanation:

The Cash Over and Short account is used to register a company's cash shortages and overages. It is an Income Statement account used by firms in front of inaccurate differences at the moment of replenishing a petty cash fund. In such a case, the Cash Over and Short account is useful to measure employee's cash management efficiency.