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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

  1. a. Why would a business use a Petty Cash Fund?
  2. b. Describe the entry needed to establish a $50 Petty Cash Fund and an entry to reimburse the fund.

a.

To determine

Indicate the reason for using a Petty Cash Fund by a business.

Explanation

Petty Cash Fund: Petty Cash Fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches.

Reason: Businesses indulge in writing checks for large amounts recurring throughout the year...

b.

To determine

Explain the journal entries to establish Petty Cash Fund and reimburse the fund.

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