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Understanding Cash Short & Over: Implications in Financial Management
Chapter 22, Problem 8(choose chapter or problem)
Cash Short and Over
a. When does a cash shortage occur?
b. Explain why a cash shortage is treated like an expense.
Questions & Answers
QUESTION:
Cash Short and Over
a. When does a cash shortage occur?
b. Explain why a cash shortage is treated like an expense.
ANSWER:Step 1 of 2
Cash Short and Over is a concept we encounter in financial management. It refers to the discrepancy or abnormal balance of a cash fund. In simpler terms, when the cash in your register doesn't match the amount it should ideally hold, we refer to it as Cash Short and Over. We determine this abnormality by a process called reconciliation. This is where we match the amount in the cash register with the issued vouchers against the disbursements made.
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Understanding Cash Short & Over: Implications in Financial Management
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Discover the intricacies of "Cash Short and Over" in financial management. Grasp how discrepancies arise and their impact on business, and learn about the vital process of reconciliation.