Question

If a business decides to decrease the amount in the petty cash fund from​ $200 to​ $100, what account is credited in the journal entry to record this​ change?

Answer 1

A decrease in the petty cash fund from $200 to $100 would involve a journal entry crediting the Petty Cash account and debiting the Cash or Bank Account for the same amount.

Step-by-step explanation:

When a business decides to decrease the amount in the petty cash fund from $200 to $100, the accounting entry to reflect this change would involve a credit to the Petty Cash account. The entry would require crediting the Petty Cash account and debiting another account such as Cash or Bank Account depending on where the funds are being transferred. The journal entry would look like this:

• Debit Cash or Bank Account: $100
• Credit Petty Cash: $100