What is the entry to replenish a petty cash fund?
What is the entry to replenish a petty cash fund?
The petty cash journal entry is a debit to the petty cash account and a credit to the cash account. The petty cash custodian refills the petty cash drawer or box, which should now contain the original amount of cash that was designated for the fund. The cashier creates a journal entry to record the petty cash receipts.
What happens when the petty cash fund is replenished?
Replenishing the petty cash fund means the petty cash custodian requests and receives cash from the company’s regular checking account in an amount that will return the cash on hand to the amount shown in the general ledger account Petty Cash.
What is included in petty cash fund?
A petty cash fund is a small amount of bills and coins that an organization keeps on the premises to pay for minor expenditures. A petty cash custodian is responsible for this fund, and maintains an up-to-date reconciliation of the amount of bills and coins remaining in it.
When the petty cash fund is replenished quizlet?
The petty cash fund is a liability with a normal debit balance. When petty cash is replenished, Petty Cash is debited and Cash is credited. When petty cash is replenished, Expenses are debited and Cash is credited.
What is fund replenishment?
Definition: Replenish refers to the action of refilling petty cash funds. In other words, it means reimbursing expenses made with petty cash.
When the petty cash fund is replenished the petty cash account is credited?
When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished. Cash equivalents are short-term investments that will be converted to cash within 120 days.
How do you record petty cash expenses?
Recording petty cash transactions
- Create new a bank account to represent your petty cash balance.
- Enter an opening balance to show the current balance of your petty cash.
- Record payments made from your petty cash.
- Record a transfer of money to top up the petty cash account.
What is debited and credited when petty cash is replenished quizlet?
A petty cash accounts should have 2 or more custodians. False. When petty cash is replenished, Expenses are debited and Cash is credited.
When replenishing the petty cash fund the company should debit?
The amount to replenish Petty Cash is the same as the total of the two items paid out of Petty Cash so there is no Cash Short and Over. Therefore, you debit the Office Supplies and Delivery Expense, and credit Cash.
When the petty cash fund is replenished the petty cash account is credited for the total of all expenditures made since the fund was last replenished?
When the petty cash fund is replenished, the petty cash account is credited for the total of all expenditures made since the fund was last replenished. During a bank reconciliation process, Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.
What is petty cash fund?
The purpose of a petty cash fund is to provide business units with sufficient cash to cover minor expenditures. The intent is to simplify the reimbursement of staff members and visitors for small expenses that generally do not Exceed $25.00, such as taxi fares, postage, office supplies, etc.
When petty cash is replenished petty cash is debited?
When petty cash is replenished, Petty Cash is debited and Cash is credited. Voided checks should be recorded in the journal. The source document for an electronic funds transfer is a memorandum. The petty cash fund is a liability with a normal debit balance.
What should be included in petty cash fund?
Examples of the items that may be paid for from the petty cash fund are flowers, food, office postage, presents, supplies, and taxi charges. There may be a petty cash fund in each major department of a company, so that local cash needs can be more readily met.
What is petty cash fund used for?
The purpose of a Petty Cash Fund is to allow for the reimbursement or purchase of minor, small-dollar (less than $100), unanticipated business expenses, where the use of alternative means is neither feasible nor cost effective.
What is contra entry?
A contra entry is recorded when the debit and credit affect the same parent account and resulting in a net zero effect to the account. These are transactions that are recorded between cash and bank accounts.
Which of the following is contra entry?
Contra entry refers to transactions involving cash and bank account. In other words, any entry which affects both cash and bank accounts is called a contra entry.
What do you mean by petty cash fund?
A petty cash fund is a small amount of company cash, often kept on hand (e.g., in a locked drawer or box), to pay for minor or incidental expenses, such as office supplies or employee reimbursements. A petty cash fund will undergo periodic reconciliations, with transactions also recorded on the financial statements.
What is contra entry Mcq?
A contra entry is an entry that involves: a cash account as well as a sales account. a bank account as well as a discount account. a cash account as well as a bank account.
Which of the following is contra entry Mcq?
Answer» d. Cash deposited to bank 9,000.
When should the petty cash fund be replenished?
The cashier will also sign the replenishment request and then will enter the expense and cash receipt information and will issue cash replenishment. Petty Cash accounts should be replenished in December of each year regardless of the balance of cash.