2 A company wants to decrease its $200.00 petty cash fund to $75.00. The entry to…
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Question “2 A company wants to decrease its $200.00 petty cash fund to $75.00. The entry to…”
A company wants to decrease its $200.00 petty cash fund to $75.00. The entry to reduce the fund is: Multiple Choice Debit Petty Cash for $75.00; debit Cash Over and Short $180.00; credit Cash $200.00 Debit Cash Over and Short for $8.75; credit Petty Cash $8.75 Debit Miscellaneous Expenses $20.00; credit Cash $20.00.
Debit to Cash $125.00; credit Petty Cash $125.00. Debit Petty Cash $105.00; credit Cash $105.00.
If a check correctly written and paid by the bank for $422 is incorrectly recorded in the company’s books for $362, how should this error be treated on the bank reconciliation? Multiple Choice Add $60 to the bank’s balance. Subtract $60 from the book balence. Subtrect $60 from the bank’s balance and add $60 to the book’s balance.
Subtract $60 from the bank’s balance. Add $60 to the book balance.
Answer
(1) To reduce the fund, enter:
Debit to Cash $125, Credit petty cash $125
(2) Error in BRS:-
Subtract $60 from Book Balance
*($422 – $362) = $60
Conclusion
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