Journalize and post petty cash fund transactions . ( LO 2 ) Journalize the petty
ID: 2576741 • Letter: J
Question
Journalize and post petty cash fund transactions.
(LO 2)
Journalize the petty cash transactions.
July 15, Cash short $3.80
Post to the Petty Cash account.
Aug. 31 balance $300
What internal control features exist in a petty cash fund?
July 1 Established petty cash fund by writing a check on Scranton Bank for $200. 15 Replenished the petty cash fund by writing a check for $196.00. On this date the fund consisted of $4.00 in cash and the following petty cash receipts: freight-out $92.00, postage expense $42.40, entertainment expense $46.60, and miscellaneous expense $11.20. 31 Replenished the petty cash fund by writing a check for $192.00. At this date, the fund consisted of $8.00 in cash and the following petty cash receipts: freight-out $82.10, charitable contributions expense $45.00, postage expense $25.50, and miscellaneous expense $39.40. Aug. 15 Replenished the petty cash fund by writing a check for $187.00. On this date, the fund consisted of $13.00 in cash and the following petty cash receipts: freight-out $77.60, entertainment expense $43.00, postage expense $33.00, and miscellaneous expense $37.00. 16 Increased the amount of the petty cash fund to $300 by writing a check for $100. 31 Replenished the petty cash fund by writing a check for $284.00. On this date, the fund consisted of $16 in cash and the following petty cash receipts: postage expense $140.00, travel expense $95.60, and freight-out $47.10.Explanation / Answer
(c) The internal control features in a petty cash fund include:
1. Proper documentation must be maintained at all times showing the details of disbursements from the petty cash such as date, name of payee, amount and purpose of disbursement.
2. The petty cash must be kept in a locked cash box to safeguard from theft.
3. Periodic reconciliation of the petty cash on hand and receipts must be done.
4. Proper segregation of duties with respect to the custody of the petty cash, recording of petty cash transactions, approval and recording of disbursement of fund balance must be ensured.
(a) Date Account Titles and Explanantions Debit Credit Jul-01 Petty Cash 200.00 Cash 200.00 (To record establishment of petty cash fund) Jul-15 Freight out 92.00 Postage expense 42.40 Entertainment expense 46.60 Miscellaneous expense 11.20 Cash over and short 3.80 Cash 196.00 (To record replenishment of petty cash fund) Jul-31 Freight out 82.10 Charitable contributions expense 45.00 Postage expense 25.50 Miscellaneous expense 39.40 Cash 192.00 (To record replenishment of petty cash fund) Aug-15 Freight out 77.60 Entertainment expense 43.00 Postage expense 33.00 Miscellaneous expense 37.00 Cash over and short 3.60 Cash 187.00 (To record replenishment of petty cash fund) Aug-16 Petty Cash 100.00 Cash 100.00 (To record increase in petty cash fund balance) Aug-31 Postage expense 140.00 Travel expense 95.60 Freight out 47.10 Cash over and short 1.30 Cash 284.00 (To record replenishment of petty cash fund)Related Questions
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