Shortage at the Close of Day
You are the cash officer closing the counter at a branch in Lahore. The teller, Rukhsana, counted her drawer three times and is short by PKR 4,300. Her opening float was PKR 250,000 and the system shows total receipts of PKR 1,842,600 and payments of PKR 1,610,400. She recalls a PKR 4,300 utility bill payment taken in the final 20 minutes, but she cannot find the stamped receipt copy. A customer, Mr. Iqbal, phones to say his utility payment was accepted but his bill still shows unpaid. The branch closes in 25 minutes and the vault must be balanced before you leave. Rukhsana has an unblemished three-year record and becomes tearful when you ask her to recount.
1. Compute the expected closing cash balance and determine whether the shortage is real. What is your immediate course of action?
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Calculation. Expected closing cash = Opening float + Receipts − Payments = 250,000 + 1,842,600 − 1,610,400 = PKR 482,200. Rukhsana's actual count is 482,200 − 4,300 = PKR 477,900. The arithmetic shortage is exactly the amount of the disputed utility bill, which is strong circumstantial evidence that the payment was received in cash but not booked or receipted.
Immediate action.
- Do not accuse. Treat it as a documentation gap until proven otherwise.
- Search the counter, the bill bundle, and the system's pending-transaction queue for the PKR 4,300 entry; check whether the receipt book has a missing serial number.
- Ask the customer to read back the receipt number and time of payment, and check the CCTV timestamp for that window.
- Record the shortage in the cash difference register, obtain Rukhsana's signature, and report to the branch manager before close.
- If the receipt is found or the payment is posted, the drawer balances. If not, the shortage stands as a recoverable difference under the bank's cash-shortage policy, not as a theft allegation.
2. Rukhsana asks you to 'just adjust it against tomorrow's receipts' so she is not marked. How do you respond, and why does the exam expect that answer?
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Refuse, clearly and kindly. Adjusting today's shortage against tomorrow's receipts is a window-dressing entry that misstates the cash position and conceals a difference from the ledger. It breaches the fundamental control that every day's cash must reconcile independently, and it converts an honest error into a reportable irregularity.
What to say. Explain that the difference must be recorded today in the difference register with her signature, that the bank's policy protects her if the cause is a posting error, and that a concealed adjustment would expose her to disciplinary action and you to liability as the supervising officer. Offer to help her trace the receipt now.
Why the exam tests this. Cash officers are judged on integrity under pressure. The correct answer is never 'make it balance' - it is 'record it accurately, investigate, escalate'. The model answer must show: (a) the shortage is a reconciling item, not a plug; (b) the register and signature create an audit trail; (c) escalation to the branch manager is mandatory; and (d) the teller is presumed honest until evidence shows otherwise, but the control is not relaxed for anyone.