Chapter 6, Problem 2PSA

1.

Summary Introduction

Introduction:Petty cash of the company which are prepared in company’s accounts.This helps company to rectify the errors in accounts which leads to increase in the net income of the company.Petty cash fund refers to the small portion of the cash fund used or to manage small expenses where payment cannot be made by cheques all the time. The petty cash transaction need to be verified to clarifies the accounts at the month end

To calculate: The petty cash transaction need to be verified to clarifies the accounts at the month end.

2.

Summary Introduction

Introduction:Petty cash of the company which are prepared in company’s accounts.This helps company to rectify the errors in accounts which leads to increase in the net income of the company.Petty cash fund refers to the small portion of the cash fund used or to manage small expenses where payment cannot be made by cheques all the time. The petty cash transaction need to be verified to clarifies the accounts at the month end

To explain: The affect on company’s financial statement if the petty cash is not replenished and no entry is made on January 31.