The petty cash fund of CHF200 for the Hansen Company appeared as follows on July 31, 2014: On July 31, the office manager gives instruction to increase the petty cash fund to CHF300. The journal entry to increase the petty cash fund would include

Question

The petty cash fund of CHF200 for the Hansen Company appeared as follows on July 31, 2014:  On July 31, the office manager gives instruction to increase the petty cash fund to CHF300. The journal entry to increase the petty cash fund would include

Quizplus · Accepted Answer

To increase the petty cash fund, a debit entry must be made to the petty cash account, increasing it from CHF200 to CHF300. Therefore, the journal entry should include a debit to Petty Cash for CHF100. There is no need to credit or debit the cash account, as the petty cash fund is a separate account designed to hold small amounts of cash for office expenses.

The Petty Cash Fund of CHF200 for the Hansen Company