The petty cash fund of the Brooks Agency is established at $190. At the end of the current period, the fund contained $121 and had the following receipts: film rentals, $15, refreshments for meetings, $20 (both expenditures to be classified as Entertainment Expense); postage, $8; and printing, $26.

Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry. (Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

Question

Gerald Melendez

Business

12 February, 13:34

The petty cash fund of the Brooks Agency is established at $190. At the end of the current period, the fund contained $121 and had the following receipts: film rentals, $15, refreshments for meetings, $20 (both expenditures to be classified as Entertainment Expense); postage, $8; and printing, $26.

Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry. (Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

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Answers (1)

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Sassy · Answer 1

Answer: The two events are when the fund is being reduced and when the fund is being eliminated.

Explanation: A petty cash fund is a fund set aside for small transactions in a business.

This fund is debited when the cash is provided and credited when the fund is being reduced by way of expenses such as postages, printing, stationaries and so on.

The petty cash fund can also be credited in a journal entry when the fund is being eliminated at the end of the period for which the fund was provided.