Palmona Co. establishes a $200 petty cash fund on January 1. Palmona uses the perpetual system in accounting for merchandise inventory.What is the journal entry to record the increase in the fund balance to $450 on January 8? A.Debit Cash $250; credit Petty Cash $250 B.Debit Petty Cash $250; credit Cash $250 C.Debit Petty Cash $250; credit Accounts Payable $250 D.Debit Miscellaneous Expense $250; credit Cash $250

As per the accounting equation, all assets have a normal debit balance. It means that when we debit…

Answered: Palmona Co. establishes a $200 petty…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 6E

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Palmona Co. establishes a $200 petty cash fund on January 1. Palmona uses the perpetual system in accounting for merchandise inventory.

What is the journal entry to record the increase in the fund balance to $450 on January 8?

	A.	Debit Cash $250; credit Petty Cash $250
	B.	Debit Petty Cash $250; credit Cash $250
	C.	Debit Petty Cash $250; credit Accounts Payable $250
	D.	Debit Miscellaneous Expense $250; credit Cash $250

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