Question

The cash excess or deficiency line is compared to the minimum cash balance required by company policy. The minimum cash balance is simply the lowest amount of ________.

Answer 1

The minimum cash balance required by company policy is the lowest amount of cash that the company must maintain in its accounts.

Step-by-step explanation:

The minimum cash balance required by company policy is simply the lowest amount of cash that the company must maintain in its accounts. This is to ensure that the company has enough liquid assets to cover its expenses and financial obligations.

For example, if a company policy states that the minimum cash balance must be $10,000, then the company must have at least $10,000 in cash available in its accounts at all times.

By comparing the cash excess or deficiency line to the minimum cash balance, the company can determine if it has enough cash on hand or if it needs to take action to avoid a cash shortfall.