Havermill Co. establishes a $410 petty cash fund on September 1. On September 30

Question

Havermill Co. establishes a $410 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $89 for Office Supplies, $169 for merchandise inventory, and $38 for miscellaneous expenses. The fund has a balance of $114. On October 1, the accountant determines that the fund should be increased by $82. The journal entry to record the establishment of the fund on September 1 is:

Choices:

Debit Cash $410; credit Petty Cash $410.

Debit Petty Cash $410; credit Accounts Payable $410.

Debit Miscellaneous Expense $410; credit Cash $410.

Debit Petty Cash $410; credit Cash $410.

Debit Cash $410; credit Accounts Payable $410.

Explanation / Answer

The journal entry to record the establishment of the fund on September 1 is:

Debit Petty Cash $410; credit Cash $410.

Petty Cash - Debit $410

To Cash - Credit                                $410

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