The entry to record the establishment of a petty cash fund would include a:
A)debit to Cash in Bank.
B)credit to Petty Cash.
C)debit to Petty Cash.
D)credit to various expenses and assets.

Question

Quizplus · Accepted Answer

The correct entry to establish a petty cash fund involves debiting Petty Cash (to increase the fund) and crediting Cash in Bank (to decrease the bank balance), reflecting the movement of cash from the bank to the petty cash fund.

The Entry to Record the Establishment of a Petty Cash