Use the following information regarding Larson Company to answer the question below.
1)Established a petty cash fund in the amount of $250.
2)Reimbursed the petty cash fund given the following petty cash fund disbursements:
A.Payment for postage,$20.
B.Payment for supplies,$70.
3)Increased the petty cash fund to $300.
4)Cash over at the end of the first period was $5.
-The entry to establish the petty cash fund would include a
A)debit to the Cash account for $250.
B)debit to the Petty Cash account for $250.
C)memorandum entry only in the ledger.
D)credit to the Petty Cash account for $250.

Question

Use the following information regarding Larson Company to answer the question below. 
1)Established a petty cash fund in the amount of $250.
2)Reimbursed the petty cash fund given the following petty cash fund disbursements:
A.Payment for postage,$20.
B.Payment for supplies,$70.
3)Increased the petty cash fund to $300.
4)Cash over at the end of the first period was $5.
-The entry to establish the petty cash fund would include a
A)debit to the Cash account for $250.
B)debit to the Petty Cash account for $250.
C)memorandum entry only in the ledger.
D)credit to the Petty Cash account for $250.

Quizplus · Accepted Answer

When establishing a petty cash fund, we debit the Petty Cash account for the amount of cash given to the custodian, in this case, $250. Therefore, the correct answer is option B.

Use the Following Information Regarding Larson Company to Answer the Question