The following transactions occurred in March of the current year. 5th: Established a Petty Cash...
Question:
The following transactions occurred in March of the current year.
5th: Established a Petty Cash fund for $250.
6th: Paid $12.50 COD shipping charges on merchandise for resale, terms FOB shipping point. The firm uses a perpetual inventory system
11th: Paid $10.75 delivery charges on merchandise sold to a customer, FOB destination.
12th: Purchased file folders for immediate use - $14.13.
14th: Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used.
18th: Purchased printer paper for $20.54 for immediate use.
27th: Paid $45.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.
28th: Paid postage of $18.
30th: Reimbursed Geldof $56.80 for mileage.
31th: A count of the Petty Cash revealed $61.63. Turned in the above receipts by account and restored the balance of Petty Cash to its original amount.
31th: Increased Petty Cash fund by $50.
Record all necessary journal entries.
Petty Cash Fund Accounting
Petty cash fund system composes of two types:
1) imprest fund system - all expenses and reimburses will only be recorded upon replenishment of the fund.
2) fluctuating fund system - each petty transaction will be recorded that will change the balance of the fund from time to time.
Answer and Explanation: 1
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View this answerWe will prepare journal entries for petty cash transactions assuming that the company uses a fluctuating fund system of petty cash.
5th: Established...
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Petty Cash Accounting Journal Entries
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Chapter 3 / Lesson 23
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Understand petty cash in accounting. Find out how a petty cash journal entry is made. Read about transactions using petty cash, its advantages and its disadvantages.
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