Question

The petty cash fund of the Brooks Agency is established at $230. At the end of the current period, the fund contained $155 and had the following receipts:

Entertainment: $41
Postage: $17
Printing : $17

Prepare journal entries to record:
a. Establishment of the fund
b. Reimbursement of the fund ocs at the end of the current period.

Answer 1

Answer and Explanation:

The journal entries are given below:

1. Petty cash A/c Dr $230

To Cash A/c $230

(Being petty cash fund established)

For recording this we debited the petty cash account as it increased the assets and credited the cash as it decreased the asset

2 Entertainment expense A/c Dr $41

Postage expense A/c Dr $17

Printing expense A/c Dr $17

To Cash A/c Dr $75 ($230 - $155)

(Being reimbursement of the fund is recorded)

For recording this we debited all expenses as it increased the expenses and credited the cash as it decreased the asset