The accounting entries to record the establishment of a petty cash fund are:

Question

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When a petty cash fund is established, a certain amount of cash is set aside in a separate account for small expenses such as office supplies, postage, and minor repairs. The initial funding for the petty cash fund is typically provided by transferring money from the company's main bank account to the petty cash account. The accounting entry to record the establishment of the petty cash fund is therefore a debit to the Petty Cash account (an asset account that represents the amount of cash on hand in the petty cash box) and a credit to the Cash at Bank account (a current asset account that represents the total amount of cash held by the company in its bank accounts). Option B is the only answer choice that matches this explanation.

The Accounting Entries to Record the Establishment of a Petty