Peterson Company's petty cash fund was established on January 1 with $500. On January 31, a count of the fund revealed: $105 in cash remaining and vouchers for miscellaneous expenses totaling $400. If the entries to record the disbursements and to replenish the fund are combined, what effect will the resulting entry have on the elements of the' financial statements?

Question

Business

Alondra Ruiz

11 January, 00:08

Peterson Company's petty cash fund was established on January 1 with $500. On January 31, a count of the fund revealed: $105 in cash remaining and vouchers for miscellaneous expenses totaling $400. If the entries to record the disbursements and to replenish the fund are combined, what effect will the resulting entry have on the elements of the' financial statements?

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Answers (1)

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Ivy Cummings · Answer 1

(395) NA (395) NA 400 (395) (395) OA

Explanation:

Data provided in the question

Petty cash fund balance = $500

Remaining cash balance = $105

Vouchers for miscellaneous expenses = $400

Sp by considering the above information, the effect would be and the balance would be

= Petty cash fund balance - remaining cash balance

= $500 - $105

= $395

So the effect would be recorded as an operating activity for $395 plus it also records the miscellaneous expense for $400 and another financial statement is also affected