The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.

Name: The journal entry to record the set-up of a petty cash fund is to debit Petty Cash and to credit Cash.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When setting up a petty cash fund, cash is transferred from the main cash account to the petty cash account. Therefore, we will debit the Petty Cash account (increasing it) and credit Cash account (decreasing it) in the amount of cash transferred.

The Journal Entry to Record the Set-Up of a Petty