Question

A petty cash fund of $500 is established on October 1. The entry to record the transaction is debit Petty Cash, credit Cash. debit Cash, credit Petty Cash. debit Petty Cash Expense, credit Cash. debit Retained Earnings, credit Petty Cash.

Answer 1

The correct option is A) debit Petty Cash, credit Cash.

A petty cash fund of $500 is established on October 1. The entry to record the transaction is "debit Petty Cash, credit cash."

What is petty cash fund?

The petty cash fund would be a small sum of company money that is frequently kept on hand (for example, in a secured drawer or box) to cover unimportant or trivial expenses like office supplies or worker reimbursements.

Some key features of petty cash fund are-

• Petty cash is a minuscule sum of money that is always on hand to cover small expenses that don't warrant submitting a check or paying with a credit card.
• Each department could possess its own petty cash pool in larger corporations.
• A petty cash fund could be utilized to pay for office supplies, greeting cards for clients, flowers, catered lunches for staff members, and employee expense reimbursement.
• The key benefits of using petty cash are its speed, convenience, and simplicity.
• Petty cash funds feature drawbacks like their susceptibility to theft and abuse and the requirement to regularly check and balance them.

To know more about the petty cash fund, here

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The correct question is -

A petty cash fund of $500 is established on October 1. The entry to record the transaction is

A) debit petty cash, credit cash.

B) debit cash, credit petty cash.

C) debit Petty cash expense, credit cash.

D) debit retained earnings, credit petty cash.