A company wants to decrease its $200 petty cash fund to $175.The entry to reduce the fund is:

Question

Quizplus · Accepted Answer

To decrease the petty cash fund, we need to debit the main cash account for the amount being taken out ($25) and credit the petty cash account for the same amount. This will result in the petty cash fund being reduced by $25, as desired. The other options either do not result in the desired $25 reduction or involve accounts that are not relevant to the transaction.

A Company Wants to Decrease Its $200 Petty Cash Fund