Royal COMPANY reported the following information in relation to imprest petty cash fund at year-end:Coins and currency 22, 000Petty cash vouchers:Gasoline 3, 000Medical supplies 1, 000Repairs 1, 500IOU from an employee 3, 500Check drawn payable to the order of Rose Anne, petty cash custodian, representingher salary. 15, 000Check of an employee returned by bank marked NSF 3, 000A sheet of paper with names of several employees together with contribution for abirthday party and attached to the sheet of paper is a currency of 5, 000The petty cash ledger account had a balance of P50, 000. What amount of petty cash fund should be reported at year-end?

FINANCIAL ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Royal COMPANY reported the following information in relation to imprest petty cash fund at year-end:Coins and currency 22, 000Petty cash vouchers:Gasoline 3, 000Medical supplies 1, 000Repairs 1, 500IOU from an employee 3, 500Check drawn payable to the order of Rose Anne, petty cash custodian, representingher salary. 15, 000Check of an employee returned by bank marked “NSF” 3, 000A sheet of paper with names of several employees together with contribution for abirthday party and attached to the sheet of paper is a currency of 5, 000The petty cash ledger account had a balance of P50, 000. What amount of petty cash fund should be reported at year-end?

A	42, 000
B	27, 000
C	37, 000
D	22, 000

Explanation:

Detailed explanation-1: -An imprest system of petty cash means that the general ledger account Petty Cash will remain dormant at a constant amount. If the amount of petty cash is $100, then the Petty Cash account will always report a debit balance of $100. This $100 is the imprest balance.

Detailed explanation-2: -Under petty cash accounting, a petty cash fund is created with a certain sum of money that is decided by the management to be used to meet the daily expenses. It is replenished at the end of the period or when necessary. Therefore, the correct answer is c) a debit to Petty Cash and a credit to Cash.

Detailed explanation-3: -The entry must show an increase in your Petty Cash account and a decrease in your Cash account. To show this, debit your Petty Cash account and credit your Cash account. When the petty cash fund gets too low, you must refill it to its set amount.

Detailed explanation-4: -An imprest account is used for handling minor disbursements whereby a fixed amount of money is set aside for this purpose. Disbursements are made as needed with a receipt or petty cash voucher being completed in each case.

There is 1 question to complete.

BACHELOR OF BUSINESS ADMINISTRATION

BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING