Question

Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry.

a. Fund amount is being reduced
b. Fund amount is being increased
c. Fund is being eliminated
d. Fund is being established

Answer 1

Answer: A. Fund amount is being reduced

C. Fund is being eliminated

Step-by-step explanation:

A petty cash fund is typically used in recording small payments. The events which can cause a Petty Cash account to be credited in a journal entry include:

• Fund amount is being reduced

• Fund is being eliminated

Therefore, the correct options are A and C.