A company plans to decrease a $330 petty cash fund to $140. The current balance in the account includes $100 in receipts and $295 in currency. The entry to reimburse and reduce the size of the petty cash fund will include a:

credit to Cash for $155.

debit to Petty Cash for $100.

debit to Cash for $155.

debit to Petty Cash for $140

Question

Business

Iliana Collier

21 February, 08:51

A company plans to decrease a $330 petty cash fund to $140. The current balance in the account includes $100 in receipts and $295 in currency. The entry to reimburse and reduce the size of the petty cash fund will include a:

credit to Cash for $155.

debit to Petty Cash for $100.

debit to Cash for $155.

debit to Petty Cash for $140

+1

Answers (2)

Know the Answer?

Gunnar Barton · Answer 1

debit to cash for $155

Explanation:

The petty cash fund is a cash fund set aside by the company for the day to day running of a company without writing a check. in a bid to reduce the petty cash fund of a company from $330 to $140 the company would have debit the required petty cash of $140 from the available petty cash fund of $295

$295 - $140 = $155 (debit to available cash)

In calculation or entry of petty cash funds, checks and receipts are not entered only cash debits or credits are considered in petty cash funds.

Harper · Answer 2

Answer: credit to Cash for $155.

Explanation: A petty cash account is a cash account that contains a small amount of money that is used for the day to day running expenses of an organisation.

A petty cash account is debited to increased the amount in the account and credited to reduce the amount in the account.

From the above question, we were told that the actual cash in the petty cash account is $295 and to reduce it to $140, the account will be credited with the sum of $155.