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 record the increase in the Petty Cash account would include a
A)debit to the Petty Cash account for $50.
B)credit to the Petty Cash account for $50.
C)memorandum entry only in the ledger.
D)debit to the Cash account for $50.

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 record the increase in the Petty Cash account would include a
A)debit to the Petty Cash account for $50.
B)credit to the Petty Cash account for $50.
C)memorandum entry only in the ledger.
D)debit to the Cash account for $50.

Quizplus · Accepted Answer

DTo increase the petty cash fund from $250 to $300, the company needs to add $50 to the fund. This is done by debiting the Petty Cash account to increase it and crediting the Cash account to decrease it by the corresponding amount.

Use the Following Information Regarding Larson Company to Answer the Question