2. Identify the two events from the following that cause a Petty Cash account to be credited in a journal entry.
a. Fund amount is being reduced. c. Fund is being eliminated.
b. Fund amount is being increased. d. Fund is being established
Fund amount is being reduced, or Fund is being eliminated is to be credited in a journal entry.
A petty cash fund is a tiny amount of an organization's cash used to pay for day-to-day expenses and minor or incidental costs, such as office supplies or miscellaneous expenses.
The Petty Cash account is credited when either of the followings-
a. Fund amount is being reduced
c. Fund is being eliminated
For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.
Bank or Book Side Add or Subtract Adj. Entry or Not
d. Outstanding checks. . . . . . . . . . . . . . .
BTN 6-2 Key comparative figures for Apple and Google follow.
$ millions Current Year Prior Year Current Year Prior Year
Accounts receivable . . . . . . . . . . . . $ 16,849 $ 17,460 $11,556 $ 9,383
Net sales . . . . . . . . . . . . . . . . . . . . . 233,715 182,795 74,989 66,00
Compute days’ sales uncollected (rounded to two decimals) for these companies for each of the two years shown. Comment on any trends for the companies. Which company has the largest percent change (rounded to two decimals) in days’ sales uncollected?
Nolan Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a $22,352 debit balance. Nolan’s June 30 bank statement shows $21,332 on deposit in the bank. Prepare a bank reconciliation for the company using the following information.
c. In reviewing the bank statement, a $90 check written by the company was mistakenly recorded in the company’s books at $99.
Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company’s fiscal year).May 1 Prepared a company check for $300 to establish the petty cash fund.15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
a. Paid $88 for janitorial expenses.
b. Paid $53.68 for miscellaneous expenses.
c. Paid postage expenses of $53.50.
d. Paid $47.15 to The County Gazette (the local newspaper) for advertising expense.
e. Counted $62.15 remaining in the petty cashbox.
16 Prepared a company check for $200 to increase the fund to $500.
31 The petty cashier reports that $288.20 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f. Paid postage expenses of $147.36.
g. Reimbursed the office manager for mileage expense, $23.50.
h. Paid $34.75 in delivery expense for products to a customer, terms FOB destination.
31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $100, leaving a total of $400.
2. Explain how the company’s financial statements are affected if the petty cash fund is not replenished and no entry is made on May 31.
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