Question

^{In a well-controlled petty cash fund, the amount of cash PLUS the amount of expenditure vouchers should be equal to the original amount in the petty cash fund.}

^{TRUE OR FALSE}

Answer 1

Question In a well-controlled petty cash fund, the amount of cash PLUS the amount of expenditure vouchers should be equal to the original amount in the petty cash fund

Answer True , Since cash is spent from petty cash fund , it is replaced with a receipt of the expenditure incurred on purchase .At all times, the balance in the petty cash box should be equal to the cash in the box plus the receipts showing purchases towards expenditure.

Management of Petty cash fund is always running with a series of general ledger / journal entries.Entries are needed for establish the fund . 2) increase or decrease the balance of fund according to receipt and expenditure 3 ) ajustments with respect to shortage of cash

Since the petty cash account is an imprest account, this balance will never change and will remain on the balance sheet , unless management intends  to change the petty cash balance.