Accounting CBE Practice Exam 2026 - Free Practice Questions and Study Guide

A change fund is an imprest-style cash fund kept with a fixed balance to provide change for daily transactions. Because the fund is fixed, it must be reconciled regularly: the cash on hand plus any receipts should equal the established fund amount. Any difference—whether you’re short or have extra cash—signals day-to-day discrepancies that need recording when replenishing the fund. That reconciliation purpose is why it’s used to track these shortages and overages.

So this statement is true: the change fund is a special cash fund with its own accounting record used to monitor and correct day-to-day cash differences.