Chavez Company maintains a petty cash fund with a balance of $100. A disbursement of $10 from the fund for postage is recorded as an expense in the accounting records
A) at the time the cash is taken from the fund.
B) when the postage is used.
C) when the petty cash fund is replenished.
D) when the adjusting entries are prepared at year end.

Question

Quizplus · Accepted Answer

The disbursement is recorded as an expense when the petty cash fund is replenished, as this is when the actual cash outflow is recognized in the accounting records.

Chavez Company Maintains a Petty Cash Fund with a Balance