A company's petty cash fund:
A)cannot be replaced by the use of debit cards.
B)is kept by two or more employees to ensure that disbursements can readily be made.
C)is opened with a particular amount of cash.
D)balance equals the cash left in the petty cash fund minus the total of the paid vouchers in the cash box.

Question

Quizplus · Accepted Answer

A petty cash fund is a small amount of cash that is kept on hand by a business for small purchases or expenses. The fund is typically opened with a particular amount of cash, such as $100. As expenses are incurred, the petty cash fund is replenished by submitting receipts or vouchers for approval and reimbursement from the company's main checking account. The balance of the petty cash fund should equal the amount of cash left in the fund minus the total of the paid vouchers or receipts in the cash box. Petty cash funds cannot be replaced by the use of debit cards, as they require physical cash for small, quick purchases. Petty cash funds are typically managed by one employee, but it may be wise to have two employees involved for added accountability.

A Company's Petty Cash Fund