Mercury Company established a petty cash fund with a $400 balance. Which of the following statements is incorrect? A. The sum of the cash plus the total of the petty cash tickets should equal $400 at all times. B. The petty cash custodian cashes a check for $400 and places the currency in the petty cash fund box. C. There is no net effect on current assets. D. A journal entry is needed to debit the Cash account and credit the Petty Cash account for $400.

Mercury Company established a petty cash fund with a $400 balance. Which of the following statements is incorrect? A. The sum of the cash plus the total of the petty cash tickets should equal $400 at all times. B. The petty cash custodian cashes a check for $400 and places the currency in the petty cash fund box. C. There is no net effect on current assets. D. A journal entry is needed to debit the Cash account and credit the Petty Cash account for $400.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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