Question

Havermill Co. establishes a $420 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $90 for Office Supplies, $171 for merchandise inventory, and $39 for miscellaneous expenses. The fund has a balance of $120. On October 1, the accountant determines that the fund should be increased by $84. The journal entry to record the establishment of the fund on September 1 is:

 Debit Cash $420; credit Petty Cash $420

.  Debit Petty Cash $420; credit Accounts Payable $420.

 Debit Miscellaneous Expense $420; credit Cash $420

.  Debit Petty Cash $420; credit Cash $420

.  Debit Cash $420; credit Accounts Payable $420.

Answer 1

Answer:

Debit Petty Cash $420; credit Cash $420

Explanation:

The journal entry for the establishment of fund is shown below:

1. Petty cash A/c Dr $420  

       To Cash A/c              $420

(Being petty cash fund established)

For establishment of fund, we debited the petty cash account and credited the cash account for $420

All other information which is given in the question is not relevant. Hence, not considered while recording the journal entry