Question 1

Morris Company established a petty cash fund with a $600 balance. Which of the following statements is incorrect?
A) A journal entry is needed to debit the Cash account and credit the Petty Cash account for $600.
B) There is no net effect on current assets.
C) The sum of the cash plus the total of the petty cash tickets should equal $600 at all times.
D) The petty cash custodian cashes a check for $600 and places the currency in the petty cash fund box.

Accepted Answer

A journal entry is not needed to establish a petty cash fund with a cash transfer. A simple transfer of funds from the Cash account to the Petty Cash account can be made. Therefore, statement A is incorrect. The other statements are correct.

Question 2

A petty cash fund was established with a $250 balance. It currently has cash of $40 and petty cash tickets as follows: Office expense $150 and Entertainment Expense $75. Which of the following would be included in the journal entry to replenish the Petty Cash fund?
A) debit to Cash Short & Over for $25
B) credit to Cash Short & Over for $15
C) credit to Cash Short & Over for $25
D) debit to Cash Short & Over for $15

Accepted Answer

B)Cash Short & Over = $250 - $150 - $75 - $40 = $15 over

Question 3

Prepare the journal entries for the following petty cash transactions of Morrison Dental Supplies.

Accepted Answer

The answer of Prepare the journal entries for the following...

Question 4

A petty cash fund was established with a $600 balance. It currently has cash of $150 and petty cash tickets as shown below:  Which of the following would be the journal entry to replenish the Petty Cash account?
A) debit various expenses $450; credit Cash $450
B) debit various expenses $450; credit Petty Cash $450
C) debit Cash $150; credit various expenses $150
D) credit Petty Cash $450; debit Cash $450

Accepted Answer

The answer of A petty cash fund was established with...

Question 5

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund, is known as the ________.
A) control system
B) voucher system
C) balanced system
D) imprest system

Accepted Answer

The imprest system requires that a constant balance be maintained in the petty cash account and that the total of cash and petty cash tickets always equal the allocated amount, making it an effective way to control and monitor petty cash expenses.

Question 6

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the Expense account.

Accepted Answer

The journal entry to replenish a petty cash fund includes a debit to various Expense accounts (depending on what was purchased with the petty cash) and a credit to the Cash account. The Petty Cash account is not involved in the replenishment entry.

Question 7

Jupiter Service Company decides to increase the amount of the petty cash fund from $200 to $700. A journal entry must be made to debit the Cash account and credit the Petty Cash account for $500.

Accepted Answer

The answer of Jupiter Service Company decides to increase the...

Question 8

The petty cash fund had an initial imprest balance of $210. It currently has $17 in cash, $4 in miscellaneous cash receipts, and an additional $183 in specific cash receipts. The debit to Cash Short & Over would be ________.
A) $6
B) $17
C) $183
D) $187

Accepted Answer

A)Cash Short & Over = $210 - $17 - $4 - $183 = $6 short

Question 9

A petty cash fund was established with a $600 balance. It currently has cash of $45 and petty cash tickets as shown below:  Which of the following would be included in the journal entry to replenish the Petty Cash fund?
A) debit to Cash Short & Over for $85
B) credit to Cash Short & Over for $85
C) debit to Petty Cash for $85
D) credit to Petty Cash for $85

Accepted Answer

The answer of A petty cash fund was established with...

Question 10

A company has a petty cash fund amount of $200. When replenished, it has petty cash receipts of $32 for gas expense, $33 for postage expense, $14 for supplies expense, and $9 for miscellaneous expenses. Assume the cash balance is not over or short. In the journal entry, Cash would be credited for ________.
A) $88
B) $74
C) $65
D) $79

Accepted Answer

A)Amount of cash spent = $32 + $33 + $14 + $9 = $88

Question 11

A petty cash fund was established with a $300 balance. It currently has cash of $73 and petty cash tickets totaling $222 for travel expense. Provide the journal entry to record the replenishment of the fund.

Accepted Answer

The answer of A petty cash fund was established with...

Question 12

The petty cash fund at Bryan Company has a designated balance of $300. The fund currently holds $133 in cash and $172 in petty cash tickets. Based on this information, which of the following statements is correct?
A) The total of the cash on hand plus petty cash tickets is more than the designated fund balance.
B) A shortage of $5 exists.
C) To replenish the petty cash fund, the company must write a check, payable to Petty Cash, for $172.
D) The petty cash fund custodian must locate the $5 discrepancy.

Accepted Answer

The answer of The petty cash fund at Bryan Company...

Question 13

A petty cash fund was established with a $600 balance. It currently has cash of $18 and petty cash tickets as shown below:  Which of the following would be included in the journal entry to replenish the Petty Cash fund?
A) debit to Cash Short & Over for $117
B) credit to Cash Short & Over for $117
C) debit to Petty Cash for $117
D) credit to Petty Cash for $117

Accepted Answer

The answer of A petty cash fund was established with...

Question 14

A petty cash fund was established with a $380 balance. It currently has cash of $41 and petty cash tickets totaling $339. Which of the following would be included in the entry to replenish the fund?
A) a credit to Petty Cash for $339
B) a debit to Petty Cash for $41
C) a credit to Cash for $41
D) a credit to Cash for $339

Accepted Answer

To replenish the petty cash fund, we need to credit cash for the total amount of cash used ($41) and the total amount of petty cash tickets used ($339). Thus, the entry would include a credit to Cash for $339.

Question 15

Which of the following would be included in the entry to record the replenishment of a petty cash fund?
A) a credit to Petty Cash
B) a debit to Accounts Receivable
C) a credit to Cash
D) a credit to Miscellaneous Expense

Accepted Answer

To replenish a petty cash fund, cash is taken from the company's main cash account and put into the petty cash fund. Therefore, the entry would include a debit to Petty Cash and a credit to Cash. Option A is incorrect because it accounts for the original establishment of the petty cash fund, but not the replenishment. Option B is incorrect because it accounts for an increase in accounts receivable, which is not related to the petty cash fund. Option D is incorrect because it accounts for an expense that is not related to the petty cash fund.

Question 16

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account. Cash plus petty cash tickets total the amount allocated to the petty cash fund.

Accepted Answer

This is an accurate definition of an imprest system.

Question 17

The petty cash fund has a current balance of $200. Based on activity in the fund, it is determined that the balance needs to be changed to $400. Which journal entry is needed to make this change?
A) Debit the Petty Cash account and credit the Cash account for $400.
B) No journal entry is needed because this change only involves cash.
C) Debit the Petty Cash account and credit the Cash account for $200.
D) Debit the Cash account and credit the Petty Cash account for $200.

Accepted Answer

The current balance of petty cash is $200 and it needs to be changed to $400. Therefore, we need to increase the balance of petty cash by $200. This means we need to debit the Petty Cash account for $200. Since the funds are coming from the Cash account, we need to credit the Cash account for $200. This is accomplished through the journal entry: Debit Petty Cash account $200 and Credit Cash account $200.

Question 18

The only time the Petty Cash account is used in a journal entry is when the account is established, increased, or decreased.

Accepted Answer

The Petty Cash account is used in journal entries primarily when it is established, increased, or decreased. These transactions involve moving funds to or from Petty Cash, which is a specific type of asset account used for minor business expenses.

Question 19

A petty cash fund was established with a $370 balance. It currently has cash of $40 and petty cash tickets totaling $330. Which of the following would be included in the entry to replenish the fund?
A) a credit to Petty Cash for $330
B) a debit to Petty Cash for $40
C) a credit to Cash for $40
D) a debit to various expenses for $330

Accepted Answer

D)Calculations: $370 - $40 = $330

Question 20

A petty cash fund was established with a $250 balance. It currently has cash of $38 and petty cash tickets totaling $212 for travel expense. Provide the journal entry to record the replenishment of the fund.

Accepted Answer

The answer of A petty cash fund was established with...

Quiz 8: Internal Control and Cash

Morris Company established a petty cash fund with a $600 balance. Which of the following statements is incorrect?

A petty cash fund was established with a $250 balance. It currently has cash of $40 and petty cash tickets as follows: Office expense $150 and Entertainment Expense $75. Which of the following would be included in the journal entry to replenish the Petty Cash fund?

Prepare the journal entries for the following petty cash transactions of Morrison Dental Supplies.

A petty cash fund was established with a $600 balance. It currently has cash of $150 and petty cash tickets as shown below: Which of the following would be the journal entry to replenish the Petty Cash account?

A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund, is known as the ________.

The journal entry to replenish a petty cash fund includes a debit to the Petty Cash account and a credit to the Expense account.

Jupiter Service Company decides to increase the amount of the petty cash fund from $200 to $700. A journal entry must be made to debit the Cash account and credit the Petty Cash account for $500.

The petty cash fund had an initial imprest balance of $210. It currently has $17 in cash, $4 in miscellaneous cash receipts, and an additional $183 in specific cash receipts. The debit to Cash Short & Over would be ________.

A petty cash fund was established with a $600 balance. It currently has cash of $45 and petty cash tickets as shown below: Which of the following would be included in the journal entry to replenish the Petty Cash fund?

A petty cash fund was established with a $300 balance. It currently has cash of $73 and petty cash tickets totaling $222 for travel expense. Provide the journal entry to record the replenishment of the fund.

The petty cash fund at Bryan Company has a designated balance of $300. The fund currently holds $133 in cash and $172 in petty cash tickets. Based on this information, which of the following statements is correct?

A petty cash fund was established with a $600 balance. It currently has cash of $18 and petty cash tickets as shown below: Which of the following would be included in the journal entry to replenish the Petty Cash fund?

A petty cash fund was established with a $380 balance. It currently has cash of $41 and petty cash tickets totaling $339. Which of the following would be included in the entry to replenish the fund?

Which of the following would be included in the entry to record the replenishment of a petty cash fund?

An imprest system is a way to account for petty cash by maintaining a constant balance in the petty cash account. Cash plus petty cash tickets total the amount allocated to the petty cash fund.

The petty cash fund has a current balance of $200. Based on activity in the fund, it is determined that the balance needs to be changed to $400. Which journal entry is needed to make this change?

The only time the Petty Cash account is used in a journal entry is when the account is established, increased, or decreased.

A petty cash fund was established with a $370 balance. It currently has cash of $40 and petty cash tickets totaling $330. Which of the following would be included in the entry to replenish the fund?

A petty cash fund was established with a $250 balance. It currently has cash of $38 and petty cash tickets totaling $212 for travel expense. Provide the journal entry to record the replenishment of the fund.