#1
What is petty cash?
Cash used for small expenses
ExplanationPetty cash is designated for minor, everyday expenditures.
#2
Who is typically responsible for managing petty cash?
Office manager
ExplanationThe office manager usually oversees petty cash management.
#3
What is a petty cash voucher?
A document used to record petty cash transactions
ExplanationPetty cash vouchers document all petty cash transactions.
#4
Why is it important to reconcile petty cash regularly?
To identify any discrepancies or errors
ExplanationRegular reconciliation helps detect any discrepancies in petty cash usage.
#5
What is the purpose of a petty cash fund?
To provide quick access to cash for small expenses
ExplanationPetty cash funds offer immediate cash availability for minor expenditures.
#6
What is the role of a petty cash custodian?
To manage and safeguard the petty cash fund
ExplanationThe petty cash custodian oversees and protects the petty cash fund.
#7
How often should petty cash be replenished?
As needed
ExplanationPetty cash should be replenished whenever it is depleted.
#8
What is the first step in establishing a petty cash fund?
Determine the amount of cash needed
ExplanationDetermining the required cash amount is the initial step in setting up a petty cash fund.
#9
Which of the following is an example of a petty cash expense?
Office supplies
ExplanationPurchasing office supplies with petty cash is a common expense.
#10
What is the journal entry to reimburse petty cash?
Debit Petty Cash, Credit Cash
ExplanationReimbursing petty cash involves debiting the Petty Cash account and crediting the Cash account.
#11
Which of the following is not a petty cash control measure?
Keeping petty cash in an unlocked drawer
ExplanationStoring petty cash in an unlocked drawer is not a secure control measure.
#12
What is the maximum amount of cash typically kept in a petty cash fund?
$1,000
ExplanationPetty cash funds commonly hold up to $1,000 in cash.
#13
What is the purpose of a petty cash reconciliation?
To verify the accuracy of petty cash transactions
ExplanationReconciliation ensures the correctness of petty cash transactions.
#14
Which of the following is a common method of replenishing a petty cash fund?
Writing a check to the petty cash custodian
ExplanationIssuing a check to the petty cash custodian is a standard method for replenishment.
#15
How can a company prevent petty cash fraud?
By conducting surprise audits
ExplanationSurprise audits help deter and detect fraudulent use of petty cash.
#16
What is the purpose of a petty cash policy?
To establish guidelines for the use of petty cash
ExplanationA petty cash policy sets rules and procedures governing petty cash usage.