Petty Cash System: Petty cash system is a system which is used for making payments for small day to day expenses. It facilitates ease to deal with small cash disbursements. Journal Entries: It is a book of original entry. It records and summarizes financial transaction of an entity in chronological manner, generally according to dual aspect of accounting. Accounting rules regarding journal entries: Balance increase when : Assets, losses and expenses get debited and liabilities, gains, and revenue get credited. Balance decrease when : Assets, losses and expenses get credited and liabilities, gains, and revenue get debited. To prepare: Journal entries and affect of transactions on company’s income statement.

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Chapter 6, Problem 1GLP

To determine

Petty Cash System:

Petty cash system is a system which is used for making payments for small day to day expenses. It facilitates ease to deal with small cash disbursements.

Journal Entries:

It is a book of original entry. It records and summarizes financial transaction of an entity in chronological manner, generally according to dual aspect of accounting.

Accounting rules regarding journal entries:

Balance increase when: Assets, losses and expenses get debited and liabilities, gains, and revenue get credited.

Balance decrease when: Assets, losses and expenses get credited and liabilities, gains, and revenue get debited.

To prepare: Journal entries and affect of transactions on company’s income statement.

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