Question

On January 2, The Public Legal Clinic issued Check 2108 for $370 to establish a petty cash fund. Indicate how this transaction would be recorded in a cash payments journal.

Answer 1

To create the petty cash fund, make the following journal entry: debit Petty cash fund account ($430), credit cash account ($430).

What is petty cash fund?

A petty cash fund's main objective is to give business units enough money to pay for small expenses. The purpose is to make it easier for staff workers and visitors to get reimbursed for little expenses like taxi rides, postage, office supplies, and other things that often don't cost more than $25.00.

The data can also come from of the petty cash fund. Add up all of the expenses that are mentioned on each petty cash vouchers in the petty cash fund. This sum should be deducted from the calculated cash withdrawal amount. The outcome ought to be 0. There is an excess of cash in the fund if there is a residual balance.

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