Which of the following statements concerning a petty cash fund is not correct?
A) A petty cash fund acts as a control by establishing a limited amount of cash to use for specific types of expenses.
B) A petty cash fund is similar to an imprest payroll account.
C) The company's petty cash custodian is responsible for operating the petty cash fund.
D) To avoid the administrative costs of the use of purchasing cards, or Pcards, many organizations have started using petty cash funds.

Question

Quizplus · Accepted Answer

This statement is not correct because the use of Pcards is an alternative to petty cash funds and is not used to avoid administrative costs. Pcards are actually preferred by many organizations because they provide a more efficient and controlled method of making small purchases.

Which of the Following Statements Concerning a Petty Cash Fund