If the amount on hand in petty cash is less than the recorded amount, petty cash is short.

If the amount on hand in petty cash is less than the recorded amount, petty cash is short.

• A. True
• B. False
• C. Not short
• D. Overages

Answer: (A)

Petty cash is a small, fixed cash fund used for minor expenses, kept as an asset with a set recorded balance. When you reconcile it, you compare the actual cash on hand to that recorded balance. If the cash you physically count is less than what the records say should be in the fund, you have a shortage—the petty cash is short. That shortfall signals that cash is missing relative to the documented fund. If instead there were more cash than the recorded balance, you’d have an overage. So the statement is true.

Petty cash is a small, fixed cash fund used for minor expenses, kept as an asset with a set recorded balance. When you reconcile it, you compare the actual cash on hand to that recorded balance. If the cash you physically count is less than what the records say should be in the fund, you have a shortage—the petty cash is short. That shortfall signals that cash is missing relative to the documented fund. If instead there were more cash than the recorded balance, you’d have an overage. So the statement is true.