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

What is the typical amount of money maintained in a petty cash fund for most small to medium-sized businesses?

$5,000 to $10,000

$1 to $10

$10,000 to $50,000

$50 to $500

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Verified step by step guidance

Understand the concept of a petty cash fund: A petty cash fund is a small amount of money kept on hand to cover minor expenses that are impractical to pay by check or electronic transfer, such as office supplies or employee reimbursements.

Recognize the typical range for petty cash funds: For most small to medium-sized businesses, the amount maintained in a petty cash fund is generally modest, as it is intended for small, incidental expenses.

Compare the given options: Analyze the ranges provided ($5,000 to $10,000, $1 to $10, $10,000 to $50,000, and $50 to $500) and determine which range aligns with the typical purpose and usage of petty cash funds.

Identify the correct range: Based on the purpose of petty cash funds, the range of $50 to $500 is most appropriate for small to medium-sized businesses, as it provides enough money for minor expenses without being excessive.

Conclude the reasoning: The correct answer is $50 to $500 because it reflects the practical and typical amount maintained in a petty cash fund for businesses of this size.