The entry to establish a petty cash fund includes:
A)A debit to Cash and a credit to Petty Cash.
B)A debit to Cash and a credit to Cash Over and Short.
C)A debit to Petty Cash and a credit to Cash.
D)A debit to Petty Cash and a credit to Accounts Receivable.
E)A debit to Petty Cash and a credit to Petty Cash Payable.

Question

Quizplus · Accepted Answer

When establishing a petty cash fund, the entry should include a debit to the Petty Cash account and a credit to the Cash account. This means that funds are being transferred from the Cash account to the Petty Cash account, and the total amount will be available in the Petty Cash account for small expenses without having to obtain a check or make a formal withdrawal from the bank.

The Entry to Establish a Petty Cash Fund Includes