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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
Edition 3ISBN: 978-0132962339 Exercise 37
Accounting for petty cash transactions
On September 1, Cool Salad Dressings creates a petty cash fund with an imprest balance of $250. During September, Michael Martell, the fund custodian, signs the following petty cash tickets:
On September 30, prior to replenishment, the fund contains these tickets plus cash of $65. The accounts affected by petty cash payments are Office supplies expense Travel expense, Delivery expense, Entertainment expense, and Inventory.
Requirements
1. Explain the characteristics and the internal control features of an imprest fund.
2. On September 30, how much cash should the petty cash fund hold before it Is replenished
3. Journalize all required entries to create the fund and replenish it. Includ explanations.
4. Make the October 1 entry to increase the fund balance to $300. Include an explanation, and briefly describe what the custodian does.
On September 1, Cool Salad Dressings creates a petty cash fund with an imprest balance of $250. During September, Michael Martell, the fund custodian, signs the following petty cash tickets:
On September 30, prior to replenishment, the fund contains these tickets plus cash of $65. The accounts affected by petty cash payments are Office supplies expense Travel expense, Delivery expense, Entertainment expense, and Inventory.
Requirements
1. Explain the characteristics and the internal control features of an imprest fund.
2. On September 30, how much cash should the petty cash fund hold before it Is replenished
3. Journalize all required entries to create the fund and replenish it. Includ explanations.
4. Make the October 1 entry to increase the fund balance to $300. Include an explanation, and briefly describe what the custodian does.
Explanation
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Financial & Managerial Accounting 3rd Edition by Charles Horngren,Harrison, Walter,Suzanne Oliver
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