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 Entry : It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health. Rules of Journal Entry: The rules for journal entry are defined by 5 accounting components, Assets: Increase in asset should be debit and decrease should be credit. Liabilities: Increase in liabilities should be credit and decrease should be debit. Equity: Increase in Equity should be credit and decrease should be debit. Expense: Increase in expense should be debit and decrease should be credit. Revenue: Increase in revenue should be credit and decrease should be debit. 1. To prepare: Journal entries in the books of K Company during the month of May.

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Answer 1

Question

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

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Answer 2

Question

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

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Answer 3

Question

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

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Answer 4

Question

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

Expert Solution & Answer

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Answer 5

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

Answer 6

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

Answer 7

Chapter 6, Problem 2PSA

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 Entry:

It means record of financial data related to business transactions in a journal in a manner so that debit equals credit. It provides an audit trail to the auditor and a means to analyze the effects of transactions to an organization’s financial health.

Rules of Journal Entry:

The rules for journal entry are defined by 5 accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

1.

To prepare: Journal entries in the books of K Company during the month of May.

Answer 8

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

Answer 9

2.

To determine

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 6 - Prob. 1MCQ Ch. 6 - Prob. 2MCQ Ch. 6 - Prob. 3MCQ Ch. 6 - Prob. 4MCQ Ch. 6 - Prob. 1DQ Ch. 6 - Prob. 2DQ Ch. 6 - Prob. 3DQ Ch. 6 - Prob. 4DQ Ch. 6 - Prob. 5DQ Ch. 6 - Prob. 6DQ

Solution Summary: The author explains the rules for journal entry, which are defined by 5 accounting components, such as Assets, Liabilities, and Revenue.

Concept explainers

To explain: Affect on financial statements of non replenished petty cash fund and lack of journal entry on May 31.

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Chapter 6 Solutions