Petty cash fund: A petty cash fund is the small amount of cash maintained by company in the hands of custodian to meet small expenses incurred in the day to day operations of the business. To determine: 1. The characteristics and the internal control features of an imprest fund. 2. How much cash should be the petty cash fund hold before it is replenished? 3. The journal entries to create the fund and replenish it, include explanations. 4. Make the October 1 entry to increase the fund balance to $800. Include an explanation and briefly describe what the custodian does.

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Chapter 8, Problem P8.31BPGB

To determine

Petty cash fund:

A petty cash fund is the small amount of cash maintained by company in the hands of custodian to meet small expenses incurred in the day to day operations of the business.

To determine:

1. The characteristics and the internal control features of an imprest fund.

2. How much cash should be the petty cash fund hold before it is replenished?

3. The journal entries to create the fund and replenish it, include explanations.

4. Make the October 1 entry to increase the fund balance to $800. Include an explanation and briefly describe what the custodian does.

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