Question

Chapter 6 Homework (Grade) Check my work 9 Exercise 6-15A Determining the amount of petty cash expense LO 6-4 1112 Consider the following events: 1. A petty cash fund of $200 was established on April 1, Year 1 2. Employees were reimbursed when they presented petty cash vouchers to the petty cash custodian 3. On April 30, Yeart the petty cash fund contained vouchers totaling $174.60 plus $26.10 of currency Required Answer the following questions: a. How did the establishment of the petty cash fund affect increase, decrease, or have no effect on total assets? Increase Decrease No effect b. What is the amount of total petty cash expenses to be recognized during April? (Round your answer to 2 decimal places.) Net charge to expense Help Chapter 6 Homework (Graded) Check my work 9 Required Answer the following questions: How did the establishment of the petty cash fund affect increase, decrease, or have no effect on total assets? Increase Decrease No effect b. What is the amount of total petty cash expenses to be recognized during April? (Round your answer to 2 decimal places.) c. When are petty cash expenses recognized at the time of establishment, reimbursement or replenishment)? Establishment Reimbursement Replenishment

Answer 1

When a petty cash fund is established, it increases total assets. The total petty cash expenses to be recognized during April is $400.70. Petty cash expenses are recognized at the time of replenishment.

Step-by-step explanation:

The establishment of the petty cash fund increases total assets. When a petty cash fund is established, cash is transferred from the bank account to the petty cash fund, resulting in an increase in the cash balance and total assets.

The total petty cash expenses to be recognized during April is $200 (the initial petty cash fund) + $174.60 (vouchers) + $26.10 (currency) = $400.70.

Petty cash expenses are recognized at the time of replenishment. Replenishment occurs when the petty cash custodian requests reimbursement for the vouchers and currency used, and the expenses are recorded in the accounting records.