# Petty cash fund Prepare journal entries for each of the following: a. Issued a check to establish a petty cash fund of $1,000. b. The amount of cash in the petty cash fund is$315. Issued a check to replenish the fund, based on the following summary of petty cash receipts: repair expense, $600, and miscellaneous selling expense,$56. Record any missing funds in the cash short and over account.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 8, Problem 8.4APE
Textbook Problem

## Petty cash fundPrepare journal entries for each of the following: a. Issued a check to establish a petty cash fund of $1,000. b. The amount of cash in the petty cash fund is$315. Issued a check to replenish the fund, based on the following summary of petty cash receipts: repair expense, $600, and miscellaneous selling expense,$56. Record any missing funds in the cash short and over account.

Expert Solution

(a)

To determine

Petty cash fund: Petty cash fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches. In day-to-day life, it becomes difficult to use checks for daily expenses. Therefore, companies maintain some minimum amount of funds in the hand for such daily expenses. These funds are called as petty cash funds. These funds are managed by custodian. This system is otherwise called as imprest system.

To prepare: Journal entry for petty cash fund.

### Explanation of Solution

Petty Cash is an asset and is increased by $1,000. Hence, Petty Cash account is debited with$1,000...

Expert Solution

(b)

To determine

To prepare: Journal entry for petty cash fund.

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