In handling of daily cash transactions,a few minor errors inevitably will occur.Which of the following is used to adjust the accounting records for these small errors?
A)The bank reconciliation
B)The Petty Cash account
C)The Cash Over and Short account
D)The cash budget

Question

Quizplus · Accepted Answer

The Cash Over and Short account is used to adjust the accounting records for minor errors in daily cash transactions. This account is used to record small discrepancies that may occur due to human errors in counting, recording or depositing cash. The amount recorded in this account usually represents the difference between the amount of cash that was actually received and the amount that was expected. Petty Cash account is used for small purchases, not for adjusting small errors in cash transactions. Bank reconciliation is used to reconcile the balance of the bank statement with the balance of the company's cash account. Cash budget is a planning tool used to estimate the future cash inflows and outflows of a business.

In Handling of Daily Cash Transactions,a Few Minor Errors Inevitably