Question

Peterson Company's petty cash fund was established on January 1 with $500. On January 31, a count of the fund revealed: $105 in cash remaining and vouchers for miscellaneous expenses totaling $400. If the entries to record the disbursements and to replenish the fund are combined, what effect will the resulting entry have on the elements of the’ financial statements?

Answer 1

(395) NA (395)NA 400 (395)(395) OA

Step-by-step explanation:

Data provided in the question

Petty cash fund balance = $500

Remaining cash balance = $105

Vouchers for miscellaneous expenses = $400

Sp by considering the above information, the effect would be and the balance would be

= Petty cash fund balance - remaining cash balance

= $500 - $105

= $395

So the effect would be recorded as an operating activity for $395 plus it also records the miscellaneous expense for $400 and another financial statement is also affected