Havermill Co. establishes a $310 petty cash fund on September 1. On September 30

Question

Havermill Co. establishes a $310 petty cash fund on September 1. On September 30, the fund is replenished. The accumulated receipts on that date represent $79 for Office Supplies, $149 for merchandise inventory, and $28 for miscellaneous expenses. The fund has a balance of $54. On October 1, the accountant determines that the fund should be increased by $62. The journal entry to record the establishment of the fund on September 1 is:

A.Debit Cash $310; credit Petty Cash $310.

B.Debit Cash $310; credit Accounts Payable $310.

C.Debit Miscellaneous Expense $310; credit Cash $310.

D.Debit Petty Cash $310; credit Cash $310.

E.Debit Petty Cash $310; credit Accounts Payable $310.

Explanation / Answer

The journal entry to record the establishment of the petty cash fund on September 1 is

Debit Petty Cash $ 310 and Credit Cash $ 310.

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