Asked by Morgan Hooper on Jun 13, 2024
Verified
In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Accounts Payable and a credit to Petty Cash.
Petty Cash Fund
A small amount of cash on hand used for paying minor expenses.
Accounts Payable
Liabilities owed by a business to its suppliers or creditors for goods or services received.
- Comprehend the handling of small cash funds and the criticality of managing cash effectively.
Verified Answer
SR
Sianna ReneeJun 16, 2024
Final Answer :
False
Explanation :
In establishing a petty cash fund, a check is written for the amount of the fund and is recorded as a debit to Petty Cash and a credit to Cash or Checking Account. There is no involvement of Accounts Payable in this transaction.
Learning Objectives
- Comprehend the handling of small cash funds and the criticality of managing cash effectively.