Suppose that on September 1, Lavene Motors opens a new showroom in Napanee, Ontario, and creates a
Question:
On September 30, prior to replenishment, the fund contains these tickets plus $161.34. The accounts affected by petty cash payments are Office Supplies Expense, Entertainment Expense, and Delivery Expense.
Required
1. Explain the characteristics and the internal control features of an imprest fund.
2. On September 30, how much cash should this petty cash fund hold before it is replenished?
3. Make the general journal entries to
(a) Create the fund,
(b) Replenish it. Include explanations.
4. Due to the risk of robbery, make the entry on October 1 to decrease the fund balance to $400. Include an explanation.
Step by Step Answer:
Accounting Volume 1
ISBN: 978-0132690096
9th Canadian edition
Authors: Charles T. Horngren, Walter T. Harrison, Jo Ann L. Johnston, Carol A. Meissner, Peter R. Norwood