What is the purpose of a Petty Cash Fund? Provide an example journal entry that a company might use to set up a Petty Cash Fund. Additionally, provide two example journal entries of payments from the Petty Cash Fund AND one example journal entry example to replenish the balance in the Fund.
|petty cash is a small cash account maintained by the entity to make the payments of petty expenses in the day-to-day business activities.|
|The person take care this petty cash account is known as petty cash custodian.|
|Example journal entries|
|Account's tittle||Debit $||Credit $|
|1. postal charges paid|
|Postage and Courier expense||100|
|2. office stationary purchased,|
|Printing and stationary expenses||25|
|Entry for replenishment of petty cash|
|Debit Petty cash a||500|
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