Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Petty Cash

Financial Accounting

6. Internal Controls and Reporting Cash

Petty Cash

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Multiple Choice

Entries are made to the petty cash account when:

a check is written for a large purchase

petty cash is counted at the end of the month

petty cash is used to pay for minor expenses

the petty cash fund is established or replenished

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Verified step by step guidance

Understand the concept of petty cash: Petty cash is a small amount of cash kept on hand to pay for minor expenses that are impractical to pay by check or electronic transfer.

Recognize when entries are made to the petty cash account: Entries are typically made when the petty cash fund is established or replenished, not when individual minor expenses are paid.

Clarify the process of establishing the petty cash fund: When the fund is created, a check is written from the main bank account, and the amount is recorded as a debit to the petty cash account and a credit to the cash account.

Explain the replenishment process: At the end of a period (e.g., month), petty cash is counted, and receipts for expenses are reviewed. A check is written to replenish the fund back to its original balance, and the expenses are recorded in the appropriate accounts.

Highlight the importance of proper documentation: Ensure all petty cash transactions are supported by receipts and properly recorded to maintain accurate financial records.