The petty cash fund has a current balance of $ 350 , which is the established fund balance. Based on activity in the fund, it is determined that the balance needs to be changed to $ 450. Which journal entry is needed to make this change?

Question

Business

Belen Sutton

11 August, 23:43

The petty cash fund has a current balance of $ 350 , which is the established fund balance. Based on activity in the fund, it is determined that the balance needs to be changed to $ 450. Which journal entry is needed to make this change?

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Answers (1)

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Jerimiah Logan · Answer 1

Debit the petty cash account and credit the cash account with $100

Explanation:

Businesses sets aside small amount of money (cash) to cover recurring expenses such as postage stamp, delivery charges, fares etc. This is usually done through the setting up of petty cash fund. The purpose of petty cash fund is to make provision for re-imbursement of minor expenses where there are no alternatives.

With regards to the above, the journal entries would be Debit petty cash account and Credit cash account with $100.