Question

Havermill Co. establishes a $410 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $89 for Office Supplies, $169 for merchandise inventory, and $38 for miscellaneous expenses. The fund has a balance of $114. On October 1, the accountant determines that the fund should be increased by $82. The journal entry to record the establishment of the fund on September 1 is:

Answer 1

Answer and Explanation:

The journal entry for establishing the fund as on September 1 is shown below:

On September 1

Petty cash Dr $410

     To cash $410

(Being establishment of fund is recorded)

Here petty cash is debited as it increased the asset and credited the cash as it decreased the asset

Therefore the same is to be considered