Question

Jackson Brothers decided to create a petty cash fund. They estimated that $200 would be needed in the fund. Demonstrate the correct journal entry to create the account by choosing the correct action from those below.

Answer 1

Based on the fact that the Jackson Brothers want to create a petty cash fund, the journal entry would be:

Date                     Account title                              Debit               Credit

XX-XX-XXXX       Petty cash                                 $200

                             Cash                                                                  $200

How is petty cash created?

In order to create the petty cash account, a cash amount needs to be debited to it to show that it is increasing in value.

The cash account would then have to be credited by the amount that the petty cash account was debited by which in this case is $200. This shows that the cash account is decreasing.

Find out more on petty cash accounts at brainly.com/question/6893535

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