Question

Claire wants to establish a Rs250 petty cash fund for her business. She requested a cheque for Rs250. What is the correct journal entry to record the transaction?

• A. Debit Cash Rs250 and credit Petty Cash Rs250
• B. Debit Petty Cash Rs250 and credit Cash Rs250
• C. Debit Petty Cash Rs250 and credit Bank Rs250
• D. Debit Petty Cash Rs250 and credit Miscellaneous Expense Rs250

Answer 1

The correct option is C

Debit Petty Cash Rs250 and credit Bank Rs250

Petty Cash A/c Dr Rs250

To Bank A/c Rs250