On July 1, 2018, Cromartie Furniture established a $150 petty cash fund. A check for $150 was made out to the petty cash custodian. During July, the petty cash custodian paid the following bills from the petty cash fund: $\begin{array}{lr}
\text { Office supplies } & \$ 36 \
\text { Postage } & 22 \
\text { Delivery charges } & 40 \
\text { Bottled water } & 28 \
\text { Total } & \$ 126
\end{array}$
-At the end of July the petty cash fund was replenished. The journal entry to establish the petty cash fund includes:

Question

On July 1, 2018, Cromartie Furniture established a $150 petty cash fund. A check for $150 was made out to the petty cash custodian. During July, the petty cash custodian paid the following bills from the petty cash fund: $\begin{array}{lr}
\text { Office supplies } & \$ 36 \
\text { Postage } & 22 \
\text { Delivery charges } & 40 \
\text { Bottled water } & 28 \
\text { Total } & \$ 126
\end{array}$ 
-At the end of July the petty cash fund was replenished. The journal entry to establish the petty cash fund includes:

Quizplus · Accepted Answer

To establish a petty cash fund, the company debits the Petty Cash account to increase it and credits the Cash account to decrease it by the same amount, reflecting the movement of cash from the main cash account to the petty cash fund.

On July 1, 2018, Cromartie Furniture Established a $150 Petty